Intro
It’s no secret that in the past few years, real estate prices in Valencia—both rental and sales—have been rising at a remarkable pace.
In the last 12 months alone, prices have jumped between 20–24%, depending on the source, leaving professionals in the field both surprised and struggling to adapt in order to better advise their clients. For long-term residents and potential buyers, it raises a pressing question: should they jump into the market now, or wait for the “bubble” to burst?
We have heard comparisons to the years 2000–2007, when there was a housing bubble fuelled by inflated credit, speculative construction, and foreign investment. Prices rose rapidly. Starting in 2008, after the global financial crisis, property values in Valencia fell dramatically—in some areas by 40–50% compared to peak levels. Many developments were left unfinished, banks accumulated non-performing loans, and unemployment soared.
Between 2021 and 2025, there has been a strong rebound, with property prices in Valencia surpassing pre-2008 levels. This time, however, the growth is driven by international demand, relocation, and limited supply.
Source: Idealista historical indices for Valencia city (sales & rentals), with supporting figures from The Olive Press (2025), Cadena SER (2025), and Europe RE (2023)
How many are we?
The third-most populated city in Spain -Valencia, has firmly put itself on the world´s map, keeping to attract more and more newcomers.
The reasons vary — from retirees seeking a laid-back lifestyle, to investors exploring the area, to people chasing job opportunities, escaping political pressures or wars, or simply looking for an affordable Mediterranean city with space, culture, local food, and an international feel.
A new trend is the arrival of high-tech companies relocating headquarters and employees to Valencia through high-skill visa programs, bringing yet another group of professionals with competitive salaries.
As a result, compared to 2024, nearly 20,000 more residents have registered with the town hall, bringing the total to 844,424 inhabitants as of January 1, 2025 (source: Valencia Ayuntamiento).
(In the wider context, the Valencian metropolitan area is estimated to be home to about 1.6 million residents.)
Interestingly, almost one-fifth—19.61%—of Valencia’s residents are foreigners (39,871 EU citizens and 125,765 non-EU). Among Europeans, Italians dominate, followed by Romanians and French. From Latin America, Venezuela leads with 10,264 residents, followed by Honduras and Argentina. U.S. citizens are also present, ranking fifth with 3,226 registered.
Given current circumstances, Valencia has also become home to significant communities from non-EU countries, including 10,196 Ukrainians and 7,911 Russians.
Demand vs Supply
As a result of the situation that has been building up over the last couple of years, the real estate market has become tense and unhealthy.
The surge in real estate prices comes down to simple math: demand vs. supply. While demand keeps rising, the counterbalance is missing. A lack of new developments, local policies aimed at limiting short-term rentals, weak incentives for multi-property owners to return properties to the market, and limited oversight of investment housing all contribute to the current situation.
Who is to blame?
More and more long-time residents of Valencia are finding themselves unable to keep up with rising rental prices. Shockingly, many are also realizing that buying an apartment in the city may already be out of reach. As a result, locals are being forced to seek accommodation on the outskirts or even in other towns.
This shift has not been well received. Frustration and anger are growing as people watch foreigners with higher purchasing power push further into the local market, making it increasingly difficult to stabilize prices or keep housing accessible for residents.
While it is easy to blame wealthy foreigners, they are not the only players. Property owners also play their part. In a free market, every owner has the right to set the price of their property. Many see this as an opportunity to rent or sell for maximum profit. It may feel unfair, but ultimately, if someone is willing to pay, it becomes a market reality.
Politics must also be considered. Both national and local strategies have so far failed to deliver meaningful relief. Two years ago, Valencia’s town hall banned the issuing of new Airbnb permits and promised to revoke existing ones that did not meet requirements.
Yet illegal short-term rentals persist, and loopholes still allow some to slip through, in some cases leaving the further battle in the hands of neighbours without government support (here you can read an example story).
In April of this year, Spain ended its Golden Visa by investment program in an effort to improve the housing situation. While the intention is understandable, statistics show the actual impact was limited. Until 2023, Golden Visa purchases made up less than 4% of transactions, and even in 2023 they only rose to about 10.7% of foreign purchases—not enough to explain the full picture.
Over the same period, Prime Minister Pedro Sánchez introduced the idea of increasing by 100% of the Property Transfer Tax (in Spanish, Impuesto de Transmisiones Patrimoniales or ITP) for non-resident buyers in Spain. Currently, this tax in the Valencian Community is 10% of the property’s purchase value, or 11% for properties valued at €1 million or more. Although the announcement resonated widely and was heavily discussed in international media, there are no signs that it is more than political discourse, and no further action has been taken.
A bigger factor is large-scale investors. One recent case went almost unnoticed: investors signed an earnest money agreement on a €9 million building in Valencia, consisting of 134 apartments—an average of just €67,000 per unit. Only after this deal became public, and local pressure mounted, did the town hall exercise its right of first refusal to acquire the building and allocate it to vulnerable families. (read the full story here) Situations like this raise the question: how many similar deals go unnoticed?
What Is the Future Perspective?
As property finders and real estate professionals, we would like to see the market stabilize, though we remain cautious. Over the past year, we have faced increasingly challenging searches and transactions.
Owners themselves are part of the challenge. We have encountered situations where owners strongly refuse to sell or rent to foreigners. Price changes after viewings have also become more common, adding unpredictability to the process.
We have also observed tension and opportunism among field professionals. For highly desirable properties, some seller agents have raised their fees to 4% plus VAT and introduced bidding wars—an approach that is new to Valencia.
Unfortunately, with demand continuing to far outpace supply, we expect these adjustments and pressures to persist.
Conclusion
As in every real estate market, Valencia’s depends on balance. While we have observed significant changes over the last few years, we are no fortune tellers. More and more, however, we believe Valencia is heading toward the dynamics of larger cities, and without actual regulations, the market is likely to remain tense.
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