The Valencian real estate market resists the Covid but they are looking for a larger, single-family house outside the big city

In fact, despite the fact that in the fourth quarter of last year there was an interannual fall of -5.3% compared to the same period in 2019, a “recovery” in the volume of sales compared to the previous quarter is observed with “surprise” (+ 15.4%). Thus, in the last three months of the year, 16,404 homes were transmitted out of the total of 59,482 that were sold throughout 2020 in the Region.

These are some of the conclusions of a study commissioned by the Association of Real Estate Agents of Valencia to the Real Estate Market Analysis Group (GAMERIN) on the evolution of the real estate market that has been presented this Friday. From now on, a quarterly study will be done.

This analysis of the situation in the Community shows “certain stability” in the prices of the sale of housing, since despite the crisis derived from the pandemic there is a “very soft reduction” of just -0.33% in the last quarter of 2020 and -1.11% per annum.

As explained by Luis Fabra Garcés, director of the Own Studies in the Real Estate Market at the University of Zaragoza and GAMERIN, prices “have stopped growing” and it will depend on whether the current ERTEs become unemployment or not. occur in the real estate market throughout 2021.

The average amount per home sale in the Community in 2020 was 126,108 euros, with a slight quarterly increase of 0.83% and an interannual increase of 3.50%, reaching “maximum levels of the last eight years”. In the case of the city of Valencia, the average amount reached 169,964 euros, (+ 2.19% quarterly and + 2.71% year-on-year) and in the province it was 119,118 euros.

In the case of the province of Valencia, in the fourth quarter of 2020 an average amount of € 1,124 / m2 was recorded, + 0.25% quarterly and -1.15% year-on-year. In València capital, the quarterly increase was 1.04%, accumulating an interannual increase of 6.37%, reaching “maximums of the last seven years” (€ 1,710 / m2).

Despite the fact that rental prices have fallen, Fabra has defended that buying to rent is still “profitable” in the Valencian Community and has even encouraged investors to buy to rent, since a powerful park will also allow more competitive prices to reside.

The average price of rental homes in the Valencian Community in December was € 7.70 / m2 per month, with a slight quarterly reduction (-1.28%), still registering an interannual increase of 2.67%.

THREE NEW TRENDS

What the pandemic has changed are the trends in demand. After a month and a half of home confinement, people have carried out a real “audit” of their homes and changed priorities.

According to the analysis carried out by Gamerin, the sale of houses in capitals and large cities has lost relative weight compared to other areas of the province, since now applicants are looking for larger homes, with open spaces and single-family homes are being considered.

Having a tight budget, they are willing to move to other areas where they can find these features at a cheaper price, Fabra explained.

The province of Valencia starred in 40.1% of the total number of home sales in the Community in 2020, reaching 23,856. Specifically, València Capital registered 1,732 sales, with a quarterly increase of 12.6%, completing the 6,421 year-on-year sales, with a year-on-year correction of 29.31%.

The city registered 10.8% of the sales of housing in the Valencian Community in the last year and 26.92% of the sales of the province, with a clear “downward trend” in relative weight. The same has happened in Castellón, while Alicante has had a “flatter behavior”.

In addition, the traditional leadership of used housing has been reinforced, with 84.6% of the total, which has led to a reduction in new housing sales, which remain at 15.3%. The typology of housing sales in the Community has marked a new “historical maximum” with respect to the weight of single-family housing (23.71%), giving rise to the corresponding historical minimum in collective housing (flats) with a weight of 76.29% .

The health crisis has intensified the preference for homes with a larger interior and exterior surface (terraces and gardens), explained Fabra.

Thus, the average surface area of ​​the acquired dwellings has been 105.4 square meters for new free housing, and 98.6 square meters for used housing. In fact, home sizes have risen to near record highs.

BRITISH BUYERS CONTINUE TO LEAD FOREIGN BUYING

In addition, 9.4% of sales have corresponded to foreigners, although Valencia is the last province of the Community in this section, far from the 35% of purchases by foreigners registered in Alicante. At this point, Fabra wanted to make it clear that he does not view British demand with pessimism and believes that Brexit will not be a problem for his demand to recover intensity once the mobility restrictions end.

In fact, the purchase of homes by foreigners is still led by the United Kingdom (15.02%), followed by Belgium (10.1%), France (7.125) which has ousted the Swedes to fourth place (7.09 %) and Germany (5.6%).

FIXED MORTGAGES

Regarding the form of sale, the Gamerin report indicates that 60% of Valencians already opt for a fixed mortgage, at an average of 23 years, and the monthly payment has dropped slightly to 450 euros per month compared to the 600 of national average. Thus, Valencians spend an average of 26.8% of their salary on mortgages compared to the 31% national average.

However, salaries in the Region are suffering “the greatest adjustments in history”, something that “does not help” the real estate market, warns Fabra.

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