Expert opinion - Terreta Spain
"When housing supply fails to keep pace with demand, prices are bound to rise. This is exactly what is happening in Valencia, where the housing deficit exceeds 50,000 units, according to the Bank of Spain, and where demographic growth is the highest in Spain." - Geoffroy Reiser
Introduction
+59% in 4 years, skyrocketing rents and a housing stock that's melting like snow in the sun: Valence is taking the world by storm, attracting more and more foreign investors in search of yield and a pleasant living environment.
While Madrid and Barcelona are already reaching €6,000/m², Valencia and its €3,000/m² are attracting investors looking for high returns...
So, is it already too late to invest or, on the contrary, is it still the right time to take up a position in a city that's catching up?
Context
Why are prices soaring in Valencia?
In Spain, price rises are widespread. Caixabank expects prices to rise by more than 10% nationwide by 2025. And within this national trend, Spain's third-largest city stands out for its rapid but still sustainable growth. Its dynamic growth is part of a catch-up process with already saturated metropolises.
Caption: The city of Valencia, Spain
Source : Google
Purchase prices in Valence
In March 2025, according to Idealista, a square meter will cost around €2,900, a far cry from the €5,000-6,000 prices in Madrid and Barcelona. But the gap is closing fast. At the current rate (5-10% per year), Valencia could reach €4,000/m² by 2029-2032. Just take a look at the price evolution curve (Idealista again) to see that the city is on a remontada remontada.
- Despite this rapid growth, the market remains accessible and investors, led by foreigners, see Valencia as an under-valued market with good value potential.
Legend: Trend in purchase prices in Valencia, March 2025
Source : Idealista
To find out more about the comparison between Valencia, Barcelona and Madrid, take a look at our experts' analysis: "Madrid, Barcelona, Valencia: where should you invest in 2025?
Rents in Valence
Rents, too, have soared in recent years. At €15.3/m² in 2025 versus €8.7 in 2020, rents have jumped 76% in 5 years. This increase is even faster than that of the purchase price, boosting gross yields: 5% to 7% depending on the area, and sometimes 8%.
Legend: Rental price trend in Valence, March 2025
Source : Idealista
How high can prices go? And why investing in Valencia remains an opportunity despite rising prices?
Why is this rise sustainable?
In reality, this increase is based on three structural pillars: constant population growth (+1.5% per year), a chronic shortage of new housing, and a booming Spanish economy (+3.5% in 2024).
A cocktail that creates lasting pressure on prices, with no sign of a bubble ready to burst.
- In short, the square meter is set to continue rising, due to lasting imbalances between supply and demand. These are not fads or speculation: they are deep-seated trends, rooted in demographics and the economy.
Valence: sustainable real estate value over the medium term
Some anticipate a turnaround, but current indicators point to a sustained upward trend.
- Regional GDP is on the rise (+3% in 2024).
- Prices are still 40% lower than in Madrid/Barcelona.
- In the country's third-largest city, 1 home is built for every 3 created. This ratio is unsustainable in the long term, and will keep upward pressure on prices as long as the pace of construction does not pick up.
Need help investing in Valencia? 
Contact the experts at Terreta Spain today.
Key figures for real estate in Valence
 Indicator |  Current data / Target |
 Average price per m² | 2.919 € |
 Price increases over 4 years | +59% (from €1,828/m² in March 2021 to €2,919/m² in March 2025) |
 Annual population growth | +1,5 % |
 Estimated gross rental yield | 5 % à 7 % |
 Medium-term price target | ~4,000 €/m² by 2029 to 2032 (5-10%/year scenario) |
Unprecedented demographic pressure on the real estate market
Immigration boosts demand
In recent years, Spain has seen a return to strong demographic growth, driven in particular by legal immigration. Net migration is expected to reach 642,000 in 2023, and over 787,000 in 2024, according to the latest projections from INE (Spain's National Statistics Institute).
Legend: Population projection for Spain
Source: INE
With this growth, the country is stimulating a residential demand that shows no signs of abating, particularly in coastal cities like Valencia.
The town's appeal stems from its privileged lifestyle - 300 days of sunshine a year, the beach and mountains at your fingertips, culture, a policy focused on ecology, and so on. - and modernized infrastructures, notably the renovation of the port and TGV links to Madrid.
All these assets also attract teleworkers and European retirees in search of a gentler lifestyle.
A supply that doesn't keep up
Building permits(visados de obra nueva) granted in January 2025 are a perfect illustration of this inertia that is "weighing down" the housing supply: only 11,355 authorizations were granted, a slight increase of 0.3% over one year.
Legend: Number of building permits for new housing units from 1991 to 2025
Sources: Idealista and Spanish Ministry of Transport
We're building less than the demographics demand, and this automatically pushes up prices.
And yet the need is great. According to a recent study by Idealista, Spain needs to produce 220,000 homes a year to avoid a shortfall of 2.74 million by 2039. Alarming news that is making headlines.
In the Valencian Community, the effects of this national shortage are amplified by the influx of foreign residents, who account for around 15% of buyers. They create increased competition for available properties, and often have greater financial resources than locals.
The 3 major obstacles to construction
The difficulties facing the Spanish real estate sector run deep. At the beginning of April 2025, the Confederación Nacional de la Construcción (CNC), the sector's professionals, published a decalogue to overcome the housing shortage. 10 measures to curb the crisis. Among these 10 recommendations, three priority levers stand out:
- Putting an end to legal complexity.
- Make up for the lack of manpower.
- Facilitate access to financing for developers.
Until these obstacles are removed, supply will not be able to catch up with demand, and prices will continue to rise.
Terreta Spain: strategic support in a complex market
How can Terreta help you invest with peace of mind?
In this context, it has never made more sense to call on an international real estate partner offering turnkey solutions and comprehensive support. Our experts can help:
- Identify undervalued properties.
- Faster processing.
- Ecological renovation with certified craftsmen. Contact an expert today.
To find out more about buying property in Spain, click on this link.
Where to invest in Valencia: Terreta Spain's advice
"Cabanyal, Ruzafa and Jesús: three nuggets with great potential. - Antoine Evêque, co-founder of Terreta Spain.
Depending on your objectives (yield, asset enhancement, betting on the future), here are the neighborhoods to target in 2025.
Sure values
- Ruzafacentral, trendy, in high demand (~5,000 €/m²).
- Ciutat Vella / El Carmen, historic charm, high rental demand.
Growing neighborhoods
- Cabanyala former fishermen's district undergoing a complete transformation (~3,000 €/m²).
- Benimaclet, student, family, very well served.
Emerging zones (bold investments)
- Jesús (~2,600 €/m²), well-connected, undergoing change.
- Torrefiel / Orriols (~2,400 €/m²), high yield potential but more fragile social profile.
Conclusion: long-term momentum in favor of investors
No, it's not too late: it may even be the best time. The window of opportunity is still open... but for how much longer? Anticipating today means securing your position in a city with great potential. But in this tense context, it's best to be well supported. Make an appointment with a Terreta expert and discover the best opportunities before anyone else.
Sources: INE, Idealista, Fotocasa, CNC.
FAQ - Is it already too late to buy in Valencia?
Is it too late to invest in Valencia?
No, on the contrary! Despite a +59% increase in 4 years, prices in Valencia remain very competitive compared to Madrid or Barcelona. The current momentum reflects a catch-up, not a bubble. There's still real potential for value enhancement.
What is the average return on a rental investment in Valence?
Between 5% and 7% gross, depending on the area and type of property. Yields higher than those observed in Spain's major cities.
What are the best neighborhoods in which to invest in 2025?
Ruzafa and Ciutat Vella: safe bet, strong rental demand.
Cabanyal and Benimaclet: fast-growing neighborhoods.Jesús, Torrefiel and Orriols: still affordable, with good medium-term potential.
What is the average price per m² in Valencia in 2025?
Around €2,919/m² (Idealista, March 2025). This is around 40-50% less expensive than Madrid or Barcelona, which partly explains the attraction for investors.
Why are prices so high in Valencia?
The imbalance between soaring demand (demographic growth, expatriates, teleworkers...) and insufficient housing supply is fuelling the rise. Spain is building half as many homes as it needs.
