When the COVID-19 pandemic struck last year, Valencia property market held its breath. With a sigh of relief, it now looks towards 2021 with renewed vigour.

Figures released for 2020 show that neither Valencia property prices nor sales totals were dramatically affected. Armed with this data, Valencia’s property experts expect the market to normalise by June this year, alongside an increase in growth.

Not such a bad year after all

Activity was especially low in the second quarter of the year, given the restrictions brought about by COVID-19. Yet there was some growth in quarter three, followed by a period of consolidation in quarter four.

As expected, the pandemic had a negative impact on the sector, prompting a 20.85% drop in sales on the previous year. 59,482 sales were closed across the wider Valencia region in 2020. Nationally, the region saw the highest number of sales at 16 per 1,000 inhabitants.

Q2 2020 was especially challenging due to prolonged periods of lockdown. The improving conditions seen in Q3 were affected by a sharp spike in infections. Despite a similar increase in infections in Q4, 16,404 sales were completed, representing a 15.47% increase on the previous quarter and a drop of only 5.37% on the same period from 2019. No quarters in 2020 experienced a significant drop when compared to data from the same period in 2019.

Measuring up to 2019

The 59,482 sales closed in 2020 represented a 20.85% drop from 2019 figures, compared to a peak of 78,604 witnessed in 2018.

Sales have since returned to 2017 levels, with the sector coping far better than other industries. Despite such headwinds, the market has surpassed expectations. We believe that the worst is now behind us.

Resilience in the city

There were 1,732 sales in Valencia’s capital in Q4 2020, representing a drop of 14.9% on 2019 levels. This is broadly indicative of all major cities across the country. Although the pace of recovery from Q2 2020 onwards was slow, growth continues.

At 6,421, annual sales figures for 2020 were down 29.31% from the previous year. Sales in the city went from 4,000 in 2013 to 10,000 at the end of 2018 – early 2019. Compared to this peak, 2020 levels show a healthy recovery.

Foreign buyers play key role

Despite the pandemic, foreign buyers of houses and apartments in Valencia continue to have a positive impact on the local market. According to a study by the Valencian Association of Estate Agents, 23.34% of purchases in 2020 were made by foreigners (13,493), with a quarterly average of 21.68% (3,457).

British buyers led these purchases with 15.02%, followed by Belgian (10.18%), French (7.12%), Swedish (7.09%) and German (5.69%) clients.

CONCLUSIONS

Valencia’s property sector has undoubtedly been affected by the pandemic. But not as severely as other industries. It is clear that overseas buyers have remained interested in Valencia throughout the pandemic and continue to represent an important segment of the market.

Yet while price variations have been limited, we will have to wait to see the Q2 2021 figures to analyse the trend.