Following the recent increases in Europe, looming inflation and the return of foreign buyers, Valencia property prices might rise significantly in 2022.
(27.10.2012) Valencia property prices will experience another period of growth, according to the Association of Real Estate Agents (API). In a recent interview given to Europa Press, it was revealed that the Association is expecting a significant rise in prices in 2022, after the market completely returns to normality, and foreign buyers return to Valencia.
In an interview with Europa Press, Vicente Diez, a spokesman for COAPI Valencia, stated that recent price increases of 10% or more in some European markets, such as Germany or the Netherlands, have pushed prices to their historic highs, and that this trend should soon reflect on Valencia property prices. At the moment, the local market is still 20% underpriced in comparison to its heyday.
Many other factors, according to Mr Diez, will contribute to this becoming a reality. Foreign buyers are expected to return to pre-pandemic levels next year, looking for properties in consolidated areas such as Valencia City, as well as single-family homes on the outskirts.
However, there are additional developments to consider. New construction is becoming more expensive as a result of the pandemic’s massive increase in material prices and severe disruption in the manufacturing process. A small amount of land available for construction within a city is extremely expensive, and this is reflected in prices. Prices will be pushed up further as a result of the low profitability of financial investment products and favourable financing conditions, as fixed-rate mortgages are currently being signed in Valencia at around 1% interest.
“There is still a long way for prices to go, so anyone thinking of buying should act quickly,” Vicente Diez said, adding, “At the moment, there are quite a few developments under construction, and there is a lot of interest in the market for them.” “Nearly all of them have been sold.”
Two other factors will also have an impact on pricing. With almost no buildable land left in Valencia, future developments will be located quite far from the city centre, but the prices will most likely remain unchanged, further affecting Valencia property prices.
Furthermore, a significant increase in inflation is predicted for Europe in the coming years, which will affect the prices, including real estate. However, experts believe that raising interest rates in response to inflation would be too risky for the economy, which is still struggling to recover from the pandemic.
Source: Europa Press
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