The property investment opportunities in Valencia are vast.
Author: Homes Overseas Article source: http://www.articledeshboard.com/. Used with author's permission.
Located along the Costa del Azahar (Orange Blossom Coast), Valencia, which has a population of around 800,000 inhabitants, is Spain's third largest city after Barcelona and Madrid. Formerly an industrial city, Valencia is today a vibrant place benefiting from huge growth in tourism levels, which along with a healthy local construction industry, has fuelled the city's strong economy over the past decade.
Despite some of the negative press reports in recent months, Spain still remains the top overseas destination for British property buyers, according to a recent survey by Yorkshire Bank. However, annual property price inflation in Spain has been declining since the end of 2003. The third quarterly figures released by the Spanish Ministry of Housing reveals that average property prices in Valencia appreciated by 5.1 per cent over the past year. Yet at just over €1,500 (£1,050) per square metre, average property prices in the city remain far cheaper than many other parts of the country and almost half that of property prices in the capital city of Madrid.
Rosemary Ellis of Spanish Full Monty comments: "Properties located in Valencia offer homeowners far better value for money compared to other surrounding areas such as Javea and Denia, located on the Costa Blanca, which is only an hour away."
The fact that property prices in Valencia are generally cheaper suggests that there may be more room for further capital growth. Furthermore the city will always prove popular with a host of tourists and homeowners because of its various attractions. Valencia offers a wonderful array of museums, monuments, restaurants, shops, a popular beach area and a vivacious nightlife, not to mention around 300 days of sunshine per year.
Tourism in Valencia has been boosted in recent times by the prestigious America's Cup Yacht race, which took place in the city last summer. Valencia attracted hundreds of thousands of sailing enthusiasts during the event and was the first European city to ever host the tournament. Following its succcess, the city has once again been selected as the venue for the next America's Cup, to be held in 2009.
Valencia's successful bid to host the America's Cup led to a £1.4 billion regeneration program, which was kick-started back in 2003. Infrastructure improvements were made across the city: the local airport was extended; a high-speed rail link to Madrid was completed and a new urban area that joined the city with the marina, port and beach areas was built. The waterfront area was completely transformed into a new and improved harbour, which has reinforced the city's status as a major cruise port. This global sailing event has also helped to create thousands of new jobs, as well as boost the local economy.
Sport is perceived as a major catalyst for placing Valencia on the world tourism map. As well as staging the America's Cup, Valencia has also been selected to host the Formula One European Grand Prix later this year, as well as the world indoor athletic championships in March. In addition, a new major football stadium is currently being constructed, while a motorcycle grand prix is set for 2011.
Cristina Treceno of Easy Property Spain says: "Valencia is a very exiting place to be right now. The tourist market here is growing at a rapid pace and the city is fast becoming one of the most popular destinations in Europe. Consequently, Valencia is a good place to invest in property, particularly because of the planned sports events and tourist attractions."
Conor Wilde of Feltrim International reports that prices for a two-bedroom apartment located along Malvarosa's beachfront - where the America's Cup is hosted - currently start from around €500,000 (£350,000). However, if you head five kilometres north along the coast to Port Saplaya, it is possible to purchase a comparable property for around €300,000 (£210,000).
Other exclusive areas in which to buy property include Avenida de Francia and Valencia's City of Arts and Science (Ciudad de las Artes y las Ciencias). Property prices here are among the most expensive in the city. Wilde reports that a two-bedroom apartment situated within these two areas typically starts from around €450,000 (£315,000) in today's market. The City of Arts and Science is particularly popular as it is made up of some of the most stunning futuristic architecture around at the moment, specifically designed to mark the arrival of the 21st century.
The old historic city centre of El Carmen is another area worth considering when buying property in Valencia. The area has witnessed somewhat of a resurrection in recent years and has become one of the most fashionable places to hang out in Valencia. There are a number of trendy bars located along the historic alleyways of El Carmen, attracting hoards of lively young people. According to Wilde, apartments in the area currently start from approximately €300,000 (£210,000).
If you are looking for a property situated within more relaxed surroundings, it may be worth heading to the outskirts of Valencia's city centre. Wilde highlights villages such as Montserrat, Turis, Catadau and Llombai (all of which are located approximately 20 minutes' drive from the city centre) as being areas that have become increasingly popular among British buyers over the past three or four years. He claims that average property prices in these areas have appreciated by up to 40 per cent over the past five years and yet property prices remain inexpensive. The price of a three- to four-bedroom house in these areas typically starts from around €280,000 (£195,000).
Ellis, on the other hand, recommends buying property in large towns such as Xativa, Ontinyent, Alzira and Lliria.
Ellis says: "These areas are very good places to invest as there is a increasing demand for holiday and long-term rental properties as a result of growing levels of tourism. These areas are also well equipped with good infrastructure, excellent roads and an impressive rail system with access to the airports as well as other parts of Spain.
Anyone wishing to enter into the buy-to-let market in Valencia should concentrate on targeting the tourist rental market rather than the domestic market. A recent report conducted by research company TNS-Demoscopia revealed that 87 per cent of all Spaniards prefer to buy property rather than rent.
Wherever you choose to buy property in and around the region, be aware that unlike some of Spains's coastal reorts which have become overcrowded with tourism, Valencia offers a real taste of Spanish culture.
Wilde comments: "To buy a home in Valencia is to buy into a Mediterranean lifestyle. Valencia offers a truly Spanish experience."
The property investment opportunities in Valencia are vast. The city is currently undergoing a period of transformation, which will continue to boost demand to buy and rent property. However, the Spanish property market has reached somewhat of a plateau and so properties in Valencia are unlikely to experience any significant form of capital growth in the short term. Any property purchase should rather be perceived as a medium to long-term investment.
Although the Spanish property purchasing process is rather straightforward, it is essential that you seek sound legal advice before parting with any money, particularly because of the risks posed by Valencia's 'land grab' law.
Land grab
One major issue that concerns some people buying property in Valencia is the controversial 'land grab' law, which was ratified in 1994. The legislation allows the local government to enforce a compulsory purchase of the land in which a property is built, if it is considered socially beneficial. However, a number of local corrupt developers and mayors have reportedly exploited loopholes in Valencia's regional law for their own financial gain.
Ellis concludes: "Areas located nearer to Alicante are mostly at risk from the 'land grab' law, partly because some old properties there are not registered properly, which makes it easier for developers to get their hands on the land for development. It is therefore wise to avoid areas known to be affected by the legislation, such as inland Alicante, Elche and Elda. Although action is now being taken to protect homeowners, it is essential that property purchasers use a local lawyer who can reduce any risks. A lawyer will check everything out for you prior to completion of a property purchase and ensure that no building work is earmarked for the land and ensure that the vendor is the actual owner of the property. Problems generally occur to people who buy property without obtaining any legal advice."
When buying property in Valencia, always ensure that you undertake a good level of research and obtain financial, as well as independent legal advice before proceeding. Valencia is easily accessible from the UK, with direct flights taking just under two and a half hours. There are a various low-cost airlines operating the route, including easyJet, Ryanair and Thomsonfly.
Marc DaSilva for Homes Overseas - Property for sale in Valencia, property investment advice and news.
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