Property rental prices have once again spiralled out of control, and for the first time in history, there are areas in the Valencian Community that are more expensive than the capital.
Rent prices in certain cities in the Valencian Community are now higher than those in the capital of Valencia. This is due to the constant rise in the price of rental housing, which has caused a 16.5% year-on-year increase in January, and an 18% increase if compared with December 2022.
The average monthly price per square meter in Valencia is €11.30, with the highest increases being in Alicante (21.2%), reaching €9.61 per square meter, and Valencia City (17.5%). Castellón saw a more modest increase of 3.9%, reaching €7.19 per square meter.
But there are three municipalities in Valencia Province where renting a flat is even more expensive than in the capital, with prices reaching up to €1,400 per month for a 100-square-meter flat. For instance, in Alboraya, located a few kilometers from the city, a residential area (Port Saplaya) has already a price tag of €14.44, per square meter. The second position is held by Canet d’en Berenguer (with €13.13/m2), located next to Sagunto, and the upcoming Volkswagen gigafactory. Finally, Benidorm, the national tourist epicenter, with a price of €12.82 per square meter, also places itself above Valencia.
But, there are many municipalities close behind Valencia, including La Pobla de Farnals (€11.87 per square meter), Altea (€11.53 per square meter), El Campello (€11.37 per square meter), and Alicante (€10.73 per square meter). These are the municipalities where the rental prices have risen the most.
This trend of spiralling prices was especially seen during January, when Benidorm experienced the highest increase (33.8%), followed by Gandía (25.8%), Alicante (23.8%), and Valencia (23.7%). Nationally, the price of rental housing rose 1.6% in January 2023 compared to the previous month, and 8.7% in the interannual rate, the first rebound since October 2020.
María Matos, Director of Studies and spokesperson for Fotocasa, attributes the new all-time high rental prices to the reduction in housing supply by over 30%, leading to a great imbalance between supply and demand, pushing prices up. The situation is becoming increasingly complicated, especially for the most vulnerable groups that cannot access housing. Frustrated demand to buy a home due to the rise in interest rates will likely shift to the rental market, which will add more pressure to the scarce supply.
This trend is also present all over the country. Rent prices have risen in 16 autonomous communities during the first month of 2023, with the Balearic Islands (+21%), the Canary Islands (+19.8%), the Valencian Community (+16.5%), Cantabria (+14.3%), and Madrid (+12.9%) leading the way.
According to the real estate portal Fotocasa, seven autonomous communities have surpased the maximum rental prices ever achieved. Madrid is the most expensive place to rent the property (€15.63 per square meter), followed by Catalonia (€15.18 per square meter), the Balearic Islands (€14.46 per square meter), the Canary Islands (€11.51 per square meter), the Valencian Community (€10.30 per square meter), Andalusia (€9.38 per square meter), and Galicia (€8.08 per square meter).
This article is brought to you by Expat Hub Valencia, a property buying agent in Valencia. Using the Expat Hub’s services, you will be able to successfully navigate Valencia’s complicated property market in no time.