For years, the two main and largest cities in Spain: Barcelona and Madrid, have been competing for preeminence in the real estate market (and in football, of course). Read how the real estate market in Spain is affected by interest rate increases, what led to the jump in prices in Valencia in the last two years, and whether it is worth placing it on your investment map.
Before the economic crisis that hit Spain in 2008, Barcelona led the prices in Spain with an average of about 4,000 euros per square meter, while Madrid stood at an average of about 3,000 euros per square meter. Following the economic crisis, real estate prices in Madrid fell by about 10% to an average of about 2,700 euros per square meter. Since then, prices have risen in Madrid and Barcelona, and see how they rise in Valencia.
The prices of apartments in Madrid 2006-2023 - 10% decrease after the crisis, 3.2% increase in the last year:
Prices of apartments in Barcelona > 2006-2023 decreased by 25% during the crisis. An increase of 1.4% in the last year
The competition between Barcelona and Madrid today is Valencia that raised its head.
Today, after about a decade has passed since the low point, it is clear that Madrid has not been left behind and has slowly reduced the prices to an average price of 4,036 euros per square meter, only 3% below the apartment prices in Barcelona, which currently stand at 4,155 euros per square meter on average. But quietly, the third largest city in Spain, Valencia, began to raise its head and signal the greatness that it is still on the map. As expected, Valencia suffered the 2008 crisis more strongly when, during that period, prices fell by about 45% from an average price of 2,400 euros per square meter to 1,350 euros per square meter. As you can see in the graph over the last two years, real estate prices in Valencia have increased with an increase of 13.2% in the last year alone.
The reasons for the increase in prices in Valencia in the last two years: For several reasons, average real estate prices in Valencia have risen faster than in Barcelona and Madrid in recent years.
1. Affordable price: Unlike Barcelona and Madrid, where young people and less able families have difficulty buying an apartment, Valencia is still possible for them. Apart from the housing costs, living costs are also significantly low. This makes Valencia an increasingly attractive destination for buyers and investors.
2. Economic growth: Valencia's economy is growing; it creates strong jobs in sectors such as tourism, technology, and manufacturing and allows job seekers to find a living in the city.
3. The effects of the Corona: Low population density, urban/rural areas and a comfortable climate have become an attractive products during the Corona period. The fact that more companies allowed remote work allowed employees in companies in Barcelona and Madrid to move to Valencia and work remotely. Even if they must come once or twice a week to Madrid or Barcelona, they can travel on the high-speed train, earn a living with high salaries, and enjoy the low cost of living in Valencia.
Real Estate Valencia as an investment destination
The price differences between Barcelona, Madrid, and Valencia are still large, so investing in the city looks tempting. All this is on the assumption that the market forces will strive to continue their momentum and reduce the price differences. Also, the entry price for investment is lower; therefore, it will be able to serve investors with lower capital. On the other hand, it is important to remember that the recent real estate crisis demonstrated that real estate prices in Barcelona and Madrid have maintained their value, relatively speaking, while real estate prices in Valencia have crashed by half. From the analysis, investors looking for a higher risk against the potential for a rapid increase can find You are wanted in Valencia. Still, investors who prefer security, stability, and higher demand will prefer to focus on Barcelona and Madrid.