Words from the experts – Terreta Spain
"When the housing supply fails to keep pace with demand, prices can only rise. This is exactly what is happening in Valencia, where the housing shortage exceeds 50,000 units, according to the Bank of Spain, and where population growth is the highest in Spain." – Geoffroy Reiser
Introduction
+59% in 4 years, skyrocketing rents, and a housing stock melting like snow in the sun: Valencia is going wild and attracting more and more foreign investors in search of returns and a pleasant living environment.
While Madrid and Barcelona are already reaching €6,000/m², Valencia, with its €3,000/m², is attracting investors looking for high returns…
So, is it already too late to invest, or on the contrary, is it still a good time to take a position in a city that is catching up?
Context
Why are prices exploding in Valencia?
In Spain, the price increase is widespread. Caixabank is forecasting an increase of more than 10% across the country in 2025. And within this national trend, Spain's third-largest city stands out for its rapid but still sustainable growth. Its dynamic is part of a catch-up logic compared to already saturated metropolises.
Caption: The city of Valencia, in Spain
Source: Google
Purchase prices in Valencia
In March 2025, the square meter is around €2,900 according to Idealista, far from the €5,000–6,000 of Madrid and Barcelona. But the gap is closing quickly. At the current rate (5 to 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 engaged in a historical remontada.
- Despite this rapid progress, the market remains accessible, and investors, especially foreigners, see Valencia as an undervalued market with good potential for appreciation.
Caption: Price evolution curve for purchases in Valencia, March 2025
Source: Idealista
To delve deeper into the comparison between Valencia, Barcelona, and Madrid, discover the analysis of our experts: "Madrid, Barcelona, Valencia: where should you invest in 2025?"
Rents in Valencia
Rents, too, have experienced an impressive surge in recent years. With €15.3/m² in 2025 compared to €8.7 in 2020, they have jumped by 76% in 5 years. A progression even faster than that of the purchase price, which boosts gross returns: 5 to 7% depending on the neighborhood, sometimes 8%.
Caption: Price evolution curve for rentals in Valencia, March 2025
Source: Idealista
How high can prices go like this? And why does investing in Valencia remain an opportunity despite rising prices?
Why is this increase 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 a lasting tension on prices, with no sign of a bubble ready to burst.
- In short, the square meter should continue to increase, due to lasting imbalances between supply and demand. These are not passing fads or speculation: these are deep trends, rooted in demographics and the economy.
Valencia: sustainable real estate appreciation in the medium term
Some anticipate a reversal, but current indicators show a sustained upward trend.
- The regional GDP is increasing (+3% in 2024).
- Prices remain 40% lower than those in Madrid/Barcelona.
- In the country's third-largest city, 1 home is built for every 3 households created. This unsustainable ratio ensures upward pressure on prices as long as the construction rate does not accelerate.
Need support to invest in Valencia? 👉 Contact the experts at Terreta Spain now.
Key real estate figures in Valencia
| 🏷️ Indicator | 📌 Current data / Target |
| 💶 Average price per m² | 2.919 € |
| 📈 Price increase 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% to 7% |
| 🎯 Medium-term average price target | ~ €4,000/m² by 2029 to 2032 (scenario at 5–10% per year) |
Unprecedented demographic pressure on the real estate market
Demand boosted by immigration
In recent years, Spain has returned to strong population growth, driven in particular by legal immigration. Its net migration is positive with 642,000 people in 2023 and is expected to exceed 787,000 in 2024 according to the latest projections from the INE (Spanish National Statistics Institute).
Legend: Demographic projection in Spain
Source: INE
With this growth, the country is stimulating residential demand that is not about to stop, particularly marked in coastal cities like Valencia.
This attractiveness is explained by a privileged living environment – 300 days of sunshine per year, the beach and mountains within easy reach, culture, a policy focused on ecology, etc. – and modernised infrastructure, including the renovation of the port and high-speed train links to Madrid.
All these advantages also attract teleworkers and European retirees in search of a gentler life.
Supply that is not keeping up
The building permits (visados de obra nueva) granted in January 2025 are a perfect illustration of this inertia that is "weighing down" the supply of housing: only 11,355 authorisations were granted, a slight increase of 0.3% over one year.
Legend: Change in the number of building permits for new housing from 1991 to 2025
Sources: Idealista and the Spanish Ministry of Transport
We are building less than what demographics require, and this mechanically drives prices upwards.
Yet the needs are glaring. According to a recent study by Idealista, Spain should produce 220,000 homes per year to avoid a deficit 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 represent approximately 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 in the Spanish real estate sector are profound. In early April 2025, the Confederación Nacional de la Construcción (CNC), industry professionals, published a decalogue to overcome the housing shortage. 10 measures designed to stem the crisis. Among these 10 recommendations, three priority levers stand out:
- End legal complexity.
- Address the labor shortage.
- 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 confidence?
In this context, using an international real estate partner, which offers turnkey solutions and comprehensive support, makes more sense than ever. Our experts can help you with:
- Identifying undervalued properties.
- Accelerating procedures.
- Ecological renovation with certified craftsmen. Contact an expert now.
To learn more about the steps involved in buying property in Spain, click on this link.
Where to invest in Valencia: Terreta Spain's advice
« Cabanyal, Ruzafa, Jesús: three high-potential gems. » – Antoine Evêque, co-founder of Terreta Spain.
Depending on your objectives (return, asset appreciation, betting on the future), here are the neighborhoods to target in 2025.
The safe bets
- Ruzafa, central, trendy, in high demand (~€5,000/m²).
- Ciutat Vella / El Carmen, historic charm, strong rental demand.
The growing neighborhoods
- Cabanyal, former fishing district undergoing transformation (~€3,000/m²).
- Benimaclet, student, family-friendly, very well connected.
Emerging areas (bold investments)
- Jesús (~€2,600/m²), well-connected and undergoing transformation.
- Torrefiel / Orriols (~€2,400/m²), high yield potential but a more vulnerable social profile.
Conclusion: long-term dynamics favorable to investors
No, it's not too late: it may even be the best time. The window of opportunity remains open... but for how much longer? Anticipating today means securing your position in a city with strong potential. But in this tense context, it is better 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 an increase of +59% in 4 years, prices in Valencia remain very competitive compared to Madrid or Barcelona. The current dynamic reflects a catch-up, not a bubble. There is still real potential for appreciation.
What is the average return on a rental investment in Valencia?
It is between 5 and 7% gross, depending on the neighborhood and type of property. Returns higher than those observed in major Spanish cities.
What are the best neighborhoods to invest in 2025?
Ruzafa and Ciutat Vella: safe bets, strong rental demand.
Cabanyal and Benimaclet: rapidly growing neighborhoods.
Jesús, Torrefiel and Orriols: still affordable, with good medium-term potential.
What is the average price per m² in Valencia in 2025?
Approximately €2,919/m² (Idealista, March 2025). This is about 40 to 50% cheaper than Madrid or Barcelona, which partly explains the attraction for investors.
Why are prices rising so much in Valencia?
The imbalance between soaring demand (population growth, expatriates, teleworkers, etc.) and an insufficient supply of housing is fueling the increase. Spain is building half as many homes as needed.
