Developers were working around the clock to obtain all of the necessary licences for their holiday apartments in Valencia before the City Council’s April deadline…
The City Council’s recent moratorium on converting entire buildings into holiday apartments is wreaking havoc on the market, some would say in a welcome move.
Previously, developers were permitted to purchase entire buildings and convert them to holiday apartments in Valencia. This was in stark contrast to the many restrictive rules imposed on private apartment owners, who found it nearly impossible to obtain a licence to rent. However, the activity of the developers created a kind of loophole that was exploited by property investors, most recently, large investment funds that saw the Valencia market as a great opportunity. Valencia, which is becoming increasingly popular with tourists and is relatively inexpensive, has presented itself as a property investment paradise. The pandemic prompted many investors to return to brick-and-mortar assets with high returns, and Valencia was brimming with such property deals.
However, the City Council recently closed this loophole. It has imposed a moratorium on the conversion of buildings into holiday apartments, and this new regulation is expected to be approved in the plenary session this month,in April. Due to the urgency, many developers who purchased buildings prior to this deadline are frantically applying for the final documents required to protect their investment.
It’s difficult to say how many new holiday apartments in Valencia will be adapted before the new tourist season begins, but we already know of four. On Calle Guillem de Castro, 56, on the corner of Guillem Sorolla street, a holiday apartment hotel is planned. This development has all of the necessary licences, and there is currently a 20-day period for potential objections.
Another project by Torres y Pamplona SL is a comprehensive renovation of a property in Calle Ruzafa, 22 that will be converted into holiday apartments. A licence was granted too to an apartment-hotel located on the corner of Corretgera and Bany dels Pavesos streets, just a few steps from Plaza de la Reina. In the barrio Botànic, Plaza Rojas Clemente is scheduled for a massive development that will add 95 new units to the market.
These are just a few of the projects that we are aware of. However, one can safely assume that there are many more in the pipeline that will be – or have recently been – approved. When all of this hits the market, there is a good chance that it will be severely oversaturated, even if all of the tourists that Valencia has lost soon return. Based on this data, it is clear that the moratorium imposed by City Council was the correct decision. The only question is whether it is too late to enforce.