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Comunidad Valenciana property market recovers: 93% growth in past year
16 July 2019 @ 00:33

HOLIDAY-HOME buying has become buoyant again in mainland Spain's Mediterranean provinces after years of lagging behind the rest of the country in pulling itself out of the financial crisis.

Nationwide property surveyors and valuers Tinsa say the second-home industry has grown by 93% in the Comunidad Valenciana – made up of the provinces of AlicanteValencia and Castellón – within the last year, both in terms of sales numbers and prices.

The southern part of the province of Alicante is described as the 'most dynamic' and with the greatest demand from foreign buyers, although Tinsa has ruled out any risk of another 'housing bubble' – the last of which burst spectacularly in 2009 after property reached its highest-ever prices in history in 2007.

Back at the time of the previous 'boom and bust', the mortgage lending system was different and mass building rife, leading to negative equity, owners who could not meet their loan repayments and a massive stock of empty properties, often which were new and had never been owned.

Recovery was delayed in the region because of the high number of empty properties outstripping demand.

But Spain and the Comunidad Valenciana have learnt a lot since then, and the panorama is very different, Tinsa says.

The recovery in the eastern region is likely to continue for 'a good two or three years', since it is not only reflected in prices but also in a recent awakening of construction of new apartments and houses, according to Tinsa.

Given that tourism is the mainstay of the Comunidad Valenciana's economy, it has been the main driver behind the recovery in the housing market, although that recovery has come three years after it started in other coastal areas in Spain – which started to improve in 2016 – and varies vastly according to 'how touristy' different towns in the three provinces are, as Tinsa explains in its report Vivienda en Costa 2019 ('Homes on the Coast 2019').

Around three in 10 holiday homes are bought by foreigners, the largest number of whom are British, although with a slight reduction seen in non-Spanish buyers in the last few years because of uncertainty over Brexit.

Benicàssim, on the Castellón coast – the site of the famous FIB International Festival – saw a typical price hike of 16.9% year on year by the end of the first quarter of 2019, Tinsa's figures show, followed by El Campello, about halfway down the province of Alicante, the southernmost of the three, with a rise in values of 15%.

The greatest price rise in the province of Valencia has been seen in its southernmost town, Oliva, at 11.9%, after many years of being in freefall, followed by Valencia city itself, about halfway up the province.

For Castellón, the most northerly province of the three, the second-highest rise after Benicàssim was seen in Burriana, at 10.9%.

A handful of towns which had already seen homes increasing in value earlier than the rest have shown a slight fall, including in Alboraia (Valencia province), down by 4.2%; Altea (Alicante province), reducing by 2.6%; Vinaròs and Almassora (Castellón province), shrinking by 2.3% and 0.9% respectively, and Cullera (Valencia province), down by 0.1%.



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