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Get Ready to Win: A New Valencia Property Cycle is Coming

Valencia skyline

It’s official: the Valencia property market is slowing down.

Better yet, Real Estate agencies have discussed and agreed on this.

We are at the verge of a new property cycle, and we should be ready to make the most of it.

Property sales in Spain dropped in August 2019 for the first time in five years, according to the National Institute of Statistics. It is expected that sales will continue to slow down in 2020.

Unfortunately, the forthcoming economic cycle in Spain is positioning new investors at the peak of property prices since 2015. It means that, if you are planning to buy in the next couple of years and you don’t have the right support, you can expect to buy at higher prices than in the last 5 years. But, there’s hope yet.

There are still enough bargains for you out there, all you need to do is search well and assess the opportunities that need to be handpicked.

Truthfully, no one knows what is going to happen, but we know for certain that we are imminently facing a plateau in terms of prices and demand, and by ‘demand’, we mean the ‘will to buy’ in the coming market cycle, but also as having the purchasing power to buy.

Valencia has one of the strongest property markets in Spain.

Rental yields are above five per cent and have stabilised at an even net eight per cent in the last three years. We are expecting these terms to be delivered right now.

If you want to know how to make your Valencia property investment profitable, contact us.

Also, contact us if you want to invest but you need a start with some advice about areas and potential. We’d be happy to help.

Rental Yields

According to a recent Idealista property market report, the property rental ROI for the third quarter of 2019 is 7.5 per cent.

To give you context about how good this return is, the state bonus delivers between 0.2 per cent and 0.3 per cent.

Also, in the best scenario, savings accounts would deliver a three per cent the first year, and two per cent the rest of the years.

Well, more than ever before, the winning strategy (unless rental prices are regulated) is buy to let.

In the last three years alone, rental prices have risen by more than 25 per cent. Flats that were once rented at 700 euros/pcm now rent at above 1,000 euros/pcm. Even in the suburbs where prices have always been low, flats that used to be rented at a price of 350 euros/pcm are now are reaching highs of 500 euros/pcm.

Therefore, buy to let is currently the strongest option for overseas investors in Valencia.

Buy to refurbish and flop also provides a strong strategy for investors, but we will talk about that in another post.

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