Buying a property in Valencia: a complete guide

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Yes, the analysis of Valencia's property market is included in our pack

Thinking of investing in real estate in Valencia? You're not alone!

Many people are captivated by Valencia's Spanish charm and dream of owning a stylish apartment or a historic townhouse there.

Is it financially viable, though? Are property prices increasing in Valencia? What is the price per sqm? Should you consider investing in El Carmen or Ruzafa? And the taxes? Where are the best rental yields?

We've got it all sorted. No worries.

The Investropa team has extensively researched this market. Actually, we have condensed all our findings in a pack. Get it now.

In this article, get ready to receive valuable insights from us.

How's the property market in Valencia?

When evaluating the strengths of a property market, everyone has their own opinion. We do things differently - we rely on data and actual facts.

Types of properties

In Valencia, there are various types of properties available for sale to suit different preferences and needs.

These include apartments and flats, which are ideal for individuals or small families seeking urban living with amenities nearby. For those looking for more space and privacy, townhouses and villas are great options, providing a mix of modern comforts and a touch of traditional charm.

Additionally, there are charming country houses or rural properties available, perfect for those seeking a tranquil retreat amidst nature.

Whether you prefer city living, suburban comfort, or countryside serenity, Valencia offers a diverse range of properties for sale to cater to every lifestyle.

Should you buy or rent?

(If you're purchasing for personal use and not for renting)

Whether you're considering settling in Valencia or already living there, you might be thinking about the pros and cons of buying versus renting a property in this vibrant Spanish city.

Obviously, it's better to buy if you are looking for a long-term investment that will increase in value over time and provide you with a steady source of income.

One data can help us make a decision - the price-to-rent ratio. This helps you understand the connection between rental income and the property's current price in terms of years.

According to Numbeo, the property price-to-rent ratio in Valencia is around 13.95, which is below the world average.

Simply put, on average, you could buy a property with just 14 years' worth of rental payments. Worth buying.

Housing prices in Valencia

On average, according to the last reported data from Ministerio de Fomento, purchasing a property in Valencia should cost you around $2,610 per square meter.

Obviously, there are some big differences. The value of a square meter for an apartment in Valencia city center might differ from a suburban house. We actually offer a more in-depth analysis in our pack for buying property in Valencia and in Spain.

To give you some context, it means that, instead of buying an apartment in Paris or London, you can afford 5 properties in Valencia.

Also, housing prices in Valencia are 25% cheaper than in Alicante.

The most expensive neighbourhoods in Valencia are probably El Pla del Real, El Cabanyal, and El Canyamelar, while the most affordable neighbourhoods are likely El Carme, El Botánico, and El Grau.

Trends

First and foremost, we have to acknowledge that Spain offers, today, a lot of stability to investors. The last Fragile State Index that has been reported for this place is 44.4.

Don't overlook this while weighing the pros and cons of buying a property in Valencia.

Also, according to the International Monetary Fund (IMF), Spain's economy is expected to soar by 8.4% in the coming 5 years, resulting in an average GDP growth rate of 1.7%.

If you intend to invest in real estate in Valencia it's a good thing because rising prosperity among individuals signals a probable upturn in housing prices.

Also, in Spain, the average GDP per capita has changed by -1.1% over the last 5 years. It's a bit concerning.

Looking for more updated data? We've done a big-picture study to find out if it's a good idea to purchase property in Spain right now.

Buying property in Valencia

Buying real estate in Valencia can be challenging due to the difficulty of obtaining reliable and up-to-date information about the process. That's why we have created the pack to buy property in Valencia and in Spain.

Buying process

In the pack of documents we have built, we've covered everything about buying a property, from the contacts you'll need to the taxes that need to be paid, and even where to look for available properties.

Now, we're presenting a simpler version to make it easier for you to understand and follow along.

This is the step-by-step process to purchase a property in Valencia:

1. Obtain an NIE (Número de Identificación de Extranjero) from the Spanish authorities.
2. Hire a reputable real estate agent familiar with the Valencia market.
3. View properties, ensuring they have a "Certificado de Eficiencia Energética" (Energy Performance Certificate).
4. Select a property and negotiate the price and terms.
5. Sign a "Contrato de Arras" (Reservation Contract) and pay a deposit (usually 10% of the property price).
6. Conduct a "Nota Simple" search to verify property ownership and any existing debts.
7. Engage a lawyer to review all legal aspects and the "Contrato de Compraventa" (Purchase Agreement).
8. Apply for a "Licencia de Obras" if renovations are planned and ensure compliance with local regulations.
9. Finalize the "Escritura de Compraventa" (Deed of Sale) before a notary, and pay the outstanding balance.
10. Settle the "Impuesto sobre Transmisiones Patrimoniales" (Property Transfer Tax) or "IVA" (VAT) if applicable.
11. Register the property with the "Registro de la Propiedad" (Land Registry) to secure your ownership.
12. Transfer utility contracts to your name and enjoy your newly acquired property in Valencia.

Also, if you're not from the country, you might want to check our article on how to buy property as a foreigner in Spain.

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Where to find a property

Explore these websites to find properties in Valencia:

• Idealista - A real estate platform in Spain offering properties for sale and rent, including holiday homes, with mortgage services and property-related resources.
• Fotocasa - A property portal that provides homes for sale and rent across various Spanish cities, accompanied by mortgage and insurance services.
• Habitaclia - A real estate platform offering properties for sale, rent, and new builds across different Spanish regions.
• Pisos - A real estate portal in Spain featuring properties for sale and rent, including houses, flats, and commercial spaces.
• YaEncontre - A real estate portal providing a wide variety of properties for sale and rent across different Spanish regions.

Also, know that we have included contacts of real estate agencies, property lawyers, moving companies, expats communities and more in our pack for buying property in Spain.

What you can get

As mentioned before, the average price per sqm in Valencia is $2,610. A 1-bedroom property with 60 square meters would cost approximately $157,000, and a 2-bedroom property with 85 square meters would cost approximately $222,000.

However, the amount you pay for a property can be different based on its characteristics and where it's found.

Housing prices in the top areas of Valencia are usually at a premium. A residence in El Pla del Remei might be priced at around $630,000, whereas a property in Ciutat Vella could cost you $280,000.

But, there are cheaper places. You could locate a house in Malilla for $200,000, or you may find a house in Camins al Grau priced only at $160,000.

We give a more detailed breakdown in our full pack for buying property in Spain.

Common mistakes

Here are the main pitfalls specific to buying a property in Valencia, Spain:

• Outdated property regulations: Failure to comply with unique Spanish property laws may lead to legal complications.
• "Embargo" properties: Buying a property under "embargo" due to the owner's debt can result in legal and financial issues.
• Coastal building restrictions: Coastal properties may face stringent regulations due to environmental protection laws.
• "Deslinde" issues: Land boundaries may not be clearly defined, causing disputes with neighbors or authorities.
• "Patrimonio" tax: Historical properties may be subject to additional taxes, impacting the overall cost.
• Off-plan risks: Purchasing a property before construction completion carries uncertainty about the final outcome and delays.
• Tenant protection laws: Renting out property may be subject to strict tenant rights, affecting landlord flexibility.
• Cultural heritage restrictions: Owning a property in a protected heritage area can limit renovation options and increase costs.

We don't want this to happen to you, so we have included a full checklist for your property investment in our pack of documents. Avoid these mistakes and save a lot of money.

Everything you need to know is included in our Spain Property Pack

Living in Valencia

Living in Valencia is a great experience, with a warm Mediterranean climate, vibrant culture, stunning architecture, and plenty of opportunities for outdoor activities.

Cost of living

The cost of living in Valencia is generally considered to be quite affordable. Prices for basic goods and services are usually lower than in other major Spanish cities.

Here are some examples to better understand the cost of living in Valencia:

• A "Horchata" (local tiger nut milk drink) at a horchatería: $3.
• Rent for a one-bedroom apartment in the trendy Ruzafa neighborhood: $1,200 per month.
• "Menu del día" (daily set lunch) in the El Carmen district: $10.
• "Agua de Valencia" (local cocktail) at a bar: $6.
• Groceries from the "Mercado Central": $40 per week for one person.
• Ticket to the City of Arts and Sciences: $15.
• Monthly membership at a local "Polideportivo" (sports center): $40-$60.
• A bottle of "Bodega Mustiguillo" local wine: $10.

Neighbourhoods

Since we like to make information easy to understand, we've created a summary table outlining the various neighborhoods in Valencia. For yields, prices and rents, check our property pack.

Life in Valencia

Valencia has a strong economy based primarily on tourism, services, and industry. It is also a major port city, and its port is the busiest on the Mediterranean Sea.

What expats usually like the most in Valencia is the Mediterranean climate, the vibrant nightlife, and the wide variety of cultural activities. They also appreciate the city's affordability and its proximity to the beach.

Regarding safety, the crime rate of Valencia is around 30, which is a fairly good score. Valencia has a low crime rate due to its strong police presence and proactive crime prevention initiatives.

A good point for a property investor - Valencia has an extensive public transportation system including a metro, tram and bus network.

Access to healthcare in Valencia is more than excellent, with a Healthcare Index of 80. A robust healthcare system always reflects positively on real estate.

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Renting out in Valencia

If you're interested in buying property not to live in, but to rent out and generate income, this section is for you.

Long-term

Tenant Profiles in Valencia

According to the data reported by Wikipedia, the home ownership rate in Spain is 76%, which is average.

It means that, if you decide to buy and rent out in Valencia, there will be a good number of people who can become your potential tenants.

If you decide to buy and rent out to long-term tenants, you should target young professionals, families, students, and retirees who are looking for a vibrant city with plenty of cultural and leisure activities. Valencia also attracts expats and tourists who are looking to explore the city for a short period of time.

Here is a little summary table we've made for you.

Rental yields

Nowadays, Valencia offers some opportunities in terms of rental yields. Actually, you can easily achieve 7 or 8% due to the growing demand for rental properties in the city.

The highest rental yields in Valencia are typically found in properties located in the city centre and in areas with good transport links. This is because these areas tend to have higher demand from tenants, which leads to higher rental prices and thus higher yields.

For further explanation and a more detailed breakdown, you can check the reports and analyses we have made.

Finally, be aware that rental incomes in Valencia are taxed at 19%, which is rather good.

Short-term

You could also decide to rent short-term to tourists looking to explore Valencia's historic Old Town, or to business travelers visiting the city for conferences.

If you decide to go with that option, look for properties in the Barrio del Carmen and the Ciutat Vella, both of which are popular tourist destinations with plenty of amenities and attractions.

Currently, there are approximately 8,000 active Airbnb listings in Valencia, reflecting a highly dynamic and bustling short-term rental market. The average daily rate stands around $120.

You have the opportunity to generate a nice additional income stream then. According to online testimonials and analytics platform like AirDNA, Guesty and Inside Airbnb, people who offer short-term rentals in Valencia can make around $2200 per month. Also, the average occupancy rate is estimated at 83%.

Is it worth buying real estate in Valencia then?

Buying a property in Valencia is a fantastic idea if you're looking for a long-term investment or planning to settle down in this vibrant Spanish city. The property market in Valencia is financially attractive, with a favorable price-to-rent ratio, making it a smart choice for potential long-term appreciation and rental income. The affordability of housing, compared to major European cities, is a huge draw, allowing you to get more value for your money.

Moreover, Spain's economic stability and projected growth in the coming years further enhance the prospect of property values increasing. Valencia offers a diverse range of property options, catering to various lifestyle preferences, whether you prefer city living, suburban comfort, or countryside tranquility. Additionally, the potential for rental income is promising, especially in central areas with high demand. With rental incomes taxed at a reasonable rate, investing in Valencia's real estate market can be financially rewarding.

If you're seeking a Mediterranean lifestyle with a warm climate, vibrant culture, and numerous outdoor activities, living in Valencia is an attractive option.

On the flip side, buying property in Valencia might not be ideal if you're planning a short-term stay, uncertain about your financial stability, or unfamiliar with local property laws. The costs associated with property transactions and management can be substantial, so it's crucial to assess your financial readiness and commitment. Additionally, if you have very specific lifestyle preferences that cannot be met within Valencia's available neighborhoods, renting might be a better choice until you find a more suitable location.

Lastly, if you're not prepared to handle property management from afar or hire a property management company, the challenges of remote management could outweigh the benefits of the investment. In summary, Valencia's property market offers great potential for long-term investors and those seeking a Mediterranean lifestyle, but careful consideration of your personal circumstances and goals is essential before taking the plunge into the real estate market.

Make sure you understand the real estate market in Valencia

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The content provided here is for informational purposes only and does not imply endorsement or advice. While we strive for accuracy, we do not guarantee the completeness or reliability of the information, including text, images, links, or other elements in this material. Following the content and analyses presented here does not assure specific outcomes. For guidance tailored to your individual circumstances, it is recommended to consult with a professional, such as a lawyer, accountant, or business advisor.