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Valencia Homes See €50,000 Discounts Amidst Plummeting Sales

Transactions drop 16% in the first quarter as real estate agents warn of overpriced properties.

Generic image of a real estate sign with a 'SOLD' sticker.
IA

Generic image of a real estate sign with a 'SOLD' sticker.

Homes in Valencia are now being sold with discounts of up to €50,000 on the initial asking price, following a sharp decline in sales during the first quarter of the year.

The real estate market in Valencia has experienced a notable cooling since last summer, with the city being particularly affected. The primary reason is that property prices have seen double-digit increases for two and a half years, making them unaffordable for many buyers. This is according to a first-quarter report from the College of Real Estate Agents (API) of Valencia.
Some buyers are looking in the metropolitan area or more distant towns, while others have given up due to banks refusing mortgages. Luis Fabra, director of the Real Estate Market Chair at the University of Zaragoza and author of the analysis, states that the situation in Valencia city is worse than in other areas. "It's much worse in Valencia because the market is price-sensitive. If salaries rise by 3% and prices by 13%, people either take on more debt or move to the metropolitan area," he explains.
Fabra points out that sales in the city center have fallen by 16% in the first quarter compared to the previous year, and by 7% over the last twelve months. "The biggest enemy (of sales) is the price," he asserts, noting that sustained 10% increases for over two years are unsustainable. "Valencia is not Andorra or the Balearic Islands," he emphasizes, adding that sellers typically take three to five quarters to adjust to price drops.
The discrepancy between prices listed on portals like Idealista and actual closing prices is significant. Vicente Díez, spokesperson and vice-president of the API College of Valencia, indicates that in the city, the average listed price is €3,339 per square meter, while the actual sale price averages €2,774, a reduction of 16.9%. For a ninety-square-meter property, this represents an adjustment of €50,850.
Across the Valencian municipalities, excluding the city center, the average offer price is €2,033 per square meter, with closing prices at €1,716, a decrease of €28,500 for a ninety-square-meter apartment. Díez highlights that properties are not selling due to inflated prices, the withdrawal of investors, and a decline in foreign demand. Demand is constrained by price and financing difficulties.

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