Valencia & the Costa Azahar
Valencia is Spain’s third largest city with a population of around 800,000 people and the region’s infrastructure is benefitting from major investment. Alicante and Valencia international airports have recently been refurbished and extended and from June 2009, Delta airlines will fly non-stop from Valencia to New York’s JFK airport. Castellón airport is due to open in 2009, motorways link the region with Madrid, Barcelona and France and high speed train services start in 2010. Valencia is fast becoming one of the best connected regions in Spain.
The Americas Cup & F1 European Grand Prix
There are two main reasons for the infrastructure improvements in and around Valencia; one is the challenger series of the Americas Cup, held in Valencia in 2007, the first time the race had been hosted in Europe in 156 years. It is still to be decided if the challenger event will return to Valencia in 2010/11 but match races and regattas will be held in the city in 2009. Valencia invested around €520m for the event, and now the marina can accommodate superyachts, it has overtaken Monaco as the biggest in the Mediterranean.
The Formula 1 Street Circuit Grand Prix, first held in 2008 and due to be hosted in Valencia until 2014, is the second reason. It attracted over 200,000 spectators to Valencia and will provide a focus for many more years of investment into the area and bring international prestige to the region. With such important events being held in Valencia, Madrid and Barcelona are now taking a back seat as Valencia takes its turn to enjoy the international limelight and put itself on the map as a destination of quality and excellence.
However, in comparison to Barcelona and Madrid, Valencia still has quite an immature property market. There are few major cities within Europe where you can buy a 3 bed apartment 5 minutes walk to the beach and 15 minutes walk to the Formula 1 street circuit, with the city centre a short tram ride away, for €138,000. With a position overlooking port and the Grand Prix circuit a 4 bed 3 bath duplex penthouse apartment with terraces in a secure complex with communal gardens and pool comes with a price tag of €620,000. On the outskirts of Valencia, a modern, high quality, newly built detached 4 bedroom 3 bathroom Villa, of some 275m2 build with mature gardens currently has an asking price of €600,000.
Although the Spanish property market is experiencing a marked downturn, prices in Valencia remain stable without the extreme reductions occurring in areas of mostly foreign investment. And while average property values in Valencia have increased 186% since the year 2000 they are still low in comparison to other major Spanish cities.
About an hour north of Valencia, in the province of Castellón but still within the Costa Azahar there are, both along the coast and inland small, unspoilt towns where the property market is dominated by the Spanish, always a good sign. But there are a number of beachside locations that have fallen prey to development and whilst they are being marketed at the next best thing in all year round resorts, it is important to do good research because as soon as the first of September arrives some of these become little more than empty ghost towns.
The Northern Costa Blanca
The truly authentic Spanish regions are not for everyone; if you do not speak or intend to learn Spanish or Valencian (which is the local language, a variant of Catalan, and in some towns only the only language spoken), then everyday life can be frustrating. So where are the Spanish traditions within an international community? The answer is the northern Costa Blanca.
The northern region of the Costa Blanca is less than an hour from Valencia and Alicante, and whilst the area has been popular with overseas buyers for years, they have always been, and remain, very popular with the affluent Spanish; many Spaniards from Valencia and Madrid have holiday homes in the region. The resorts along the coast of the Northern Costa Blanca are not package holiday destination;, in fact, there are very few hotels at all, giving some of the best rental potential in the whole of Spain. Villas located around the cosmopolitan marinas and beaches have always been sought after by both investors and holiday makers alike.
As the prices of coastal properties rose, so did the interest in real estate inland and 30 minutes inland from the northern Costa Blanca are small villages with an authentic Spanish lifestyle. But good research is vital perhaps even more so within the Valencian Community because of the well publicised land grab issue. There is no denying that the law, known as the LRAU or LUV as it was updated to in 2006, is a problem for this region, but, and this is a significant but, it is primarily a problem for those that have either already bought or are looking for a run down finca with miles of uninterrupted views. If the land you are interested in is classified as ‘rustic’ or ‘non-urban’, information readily available from the local tow hall there is a risk of this land being developed in the future. As the current law stands, a developer can demand payment pay towards infrastructure costs of the new development and take land, for a new access road for example. So the problem mainly exists for people who have already bought property on land that has been reclassified, not for future purchasers who take sound legal advice and make sure the checks to safe guard their purchase are carried out.
But while Valencia city has a relatively stable property market, the northern Costa Blanca is really feeling the effects of the recession. Serious price reductions are now coming through as stretched foreign owners struggling to meet mortgage obligations. In the up market coastal area of Moraira, a south facing 7 bedroom 6 bathroom country house 20 minutes from the coast, with pool, sauna, garage, extensive sun terraces and patio, was put on the market in 2008 for €595,000. The property is currently operating as a bed and breakfast business but could easily be converted into a family home. As an example of a distressed sale in this region, this property has just been reduced to €395,000.
Inland from Javea, a private finca on a 3 acre plot, totally renovated with 3 bedrooms, 3 bathrooms, living room, separate dining area, bodega, library, various patios and terraces, 100m2 garage, stables and a paddock on a plot of over 12,000m2, was on the market for €695,000. This property has just been sold for €550,000, an example of how lower offers are being accepted in these challenging times.
There is no doubt whatsoever that it is a buyer’s market right now. Transactions may be fewer, but interest has recently been rising as investors look for the best deals. There are hundreds of properties on the market, many claiming massive discounts, but if that property was overpriced in the first place as many were, and to be quite honest, many still are, you need to do your research to ensure that you are in fact buying a great deal and to make sure your investment in the mid to long term is protected.