Valencia’s real estate market in the first half of 2025 shows impressive growth dynamics. According to the latest data, the average price per square meter in the city reached €3,108, which is 30.1% higher than the same period last year. In the first quarter of 2025, Valencia showed a 14.5% year-on-year price growth — one of the highest rates among Spanish capitals.
Let’s analyze the four key factors driving this dynamic.
Scale of Growth: Numbers and Facts
Spain’s housing price index in the fourth quarter of 2024 grew by 11.26% year-on-year — the sharpest annual growth since statistics began in 2007. The Valencian Community showed 12.2% year-on-year growth, but it’s important to understand the context: the average price per square meter in Valencia is €2,243, significantly lower than Madrid (€4,030/m²) and Barcelona (€3,937/m²).
Within the city itself, growth is uneven. The highest price increases were recorded in the districts:
- Jesús: +19.9%
- Patraix: +18.6%
- Pueblos del Sur: +16.3%
- Extramurs: +15.3%
First Factor: Easing Monetary Policy
The main reason for growth is the change in the European Central Bank’s interest rate policy. After a cycle of rate hikes from July 2022 to September 2023, the ECB began lowering them in 2024.
The 12-month Euribor, which is the basis for most mortgage loans in Spain, fell to 2.081% in June 2025. Mortgage interest rates decreased from nearly 4% at the beginning of 2024 to 2.5-3% by July 2025.
The result is obvious: the number of new mortgage loans increased by 22.1% in the first half of 2025. More affordable credit means more buyers in the market, which naturally pushes prices up.
Second Factor: Explosive International Demand
In 2024, Valencia recorded a 15% growth in foreign property buyers. In 2023, foreign buyers accounted for almost 30% of all real estate transactions in the Valencian Community — out of more than 95,600 total transactions, over 27,900 were made by international buyers.
British citizens lead, followed by buyers from Belgium, Netherlands, Germany, Poland, and France.
The historic center example is particularly telling: in 2024, two-thirds of all housing purchases in Ciutat Vella were made by international buyers. This led to average property prices in this area rising to €700,000-€800,000.
The reasons for such popularity among foreigners are obvious:
- Mediterranean climate
- Lower prices compared to Barcelona and Madrid
- Developed infrastructure
- High quality of life
Third Factor: New Supply Shortage
The number of new housing projects in Valencia decreased by 75% year-on-year in the third quarter of 2024. Meanwhile, demand continues to grow: between January and May 2025, the number of construction permits increased by 14.8%, but this is still insufficient to meet demand in popular areas where land is scarce.
The result is obvious — properties sell faster. In popular neighborhoods like Ruzafa, El Carmen, and Cabanyal, properties sell in record-short timeframes.
A classic situation: high demand with limited supply inevitably leads to price increases.
Fourth Factor: Infrastructure Investments
The European Investment Bank allocated €69 million in 2025 to expand Valencia’s electric bus fleet, including the purchase of 145 new electric buses and necessary infrastructure upgrades.
Historically, areas with improved transport connections show property value growth. In Valencia, real estate prices have increased significantly, especially in areas with improved transport access.
Economic Context and Forecasts
The Valencian Community’s GDP grew by 3.0% in 2024, comparable to national figures (3.2%). This creates a favorable economic environment for real estate market development.
Experts predict continued price growth. The combination of relatively low prices, high quality of life, foreign interest, and limited new construction ensures continued demand pressure on the market.
Investment attractiveness remains high: average rental yield in Valencia is 6% annually, exceeding the national level.
Conclusions
The growth in Valencia real estate prices in the first half of 2025 is driven by four main factors:
- ECB monetary policy easing — lower interest rates make mortgages more accessible
- Record international demand — 30% of purchases are made by foreigners
- Acute supply shortage — new construction decreased by 75%
- Infrastructure investments — major investments in the transport system
According to expert forecasts, price growth will continue in the second half of 2025. For investors and buyers, this means the current period may be optimal for market entry, while prices haven’t yet reached Barcelona and Madrid levels.
Valencia continues to be one of Spain’s most attractive real estate markets, combining reasonable prices with high quality of life and growing international recognition.
