The real estate market in the Community of Valencia started to hit the brakes after a while. two-year runaway increases in prices and sales. A report from the Valencian Association of Realtors (API) presented this week warns that new home prices hit the historical series maximum across the entire Valencian Community in the second quarter of 2022, but the market has been cooling off since June. Asicval, the Association of Realtors in the Community of Valencia, confirmed that the number of visits to homes for sale in the last three months has decreased by 30% compared to the same period last year due to the increase in prices. Economic uncertainty created by the war and energy crisis in Euribor (which extracts purchasing power) and Ukraine. Some buyers have stopped their calls in anticipation that prices will drop in the coming months. As for rent, the increase in rents due to lack of supply causes an increase in shared rentals.
Nora Garcia, The head of Asicval explains that they have detected a slowdown in visits to apartments for sale since interest rates began to rise sharply in June. The average mortgage cost of 150,000 euros has become 178 euros a month more expensive this summer, and a significant number of buyers are starting to lose the numbers. «The average cost of a second-hand house in Valencia is 200,000 euros. Prices have gone up a lot and that means it’s not as joyous now as it was a year ago. We come from very high sales figures. What happened last year was not normal. Even if sales fall, we will continue with good numbers,” says García. The Asicval head said the drop in sales will be seen in the third and fourth quarter statistics.
Vincent Diez A spokesperson for the API Valencia Association fully agrees with Nora García. “There is a decrease in the number of contacts and visits for various reasons. The most affected was the increase in interest rates. As soon as the mortgage payment rises, the number of possible buyers decreases. Many are doomed to rent because the numbers don’t fit them,” says Díez. The API spokesperson emphasizes that inflation and economic uncertainty are other brakes. “In times of uncertainty, the market slows down,” he says.
The problem with rent is that rents go up so much that many people may only desire shared housing. “I’m closing rentals for three or four people. Co-workers or couples who decide to share their expenses with other couples because they can’t afford rising rents and inflation. An apartment in Valencia that cost 800 euros a year and a half ago is now worth 1,200,” said Nora García.
Cristina Recasens, Founder of Recasens Real Estate, this summer “the drop in operations was very noticeable. Inflation played a role. The slowdown mainly affects mid-priced real estate. There are people waiting to see if they lower the price ». Elizabeth Andrew, Percent’s director of product suggests that banks will begin to tighten credit conditions in the face of rate hikes in the coming weeks, at a time when some of the operations have not slipped past the filter.