In Valencia there are hardly any new-build homes for sale; there are only 185 new homes for sale in the city of Valencia, the first time this has been the case in the city since records have been kept, and it is keeping sale prices at very high levels.
But the most alarming thing is the speed at which it is decreasing, by 23% in the last quarter. A revealing fact is that in 60 of the 88 neighbourhoods in the city of Valencia there are no new housing developments for sale. In two out of every three neighbourhoods in Valencia there are no new housing developments.
The causes of this decline have been varied in recent years, with inflation and its consequences as the basis (rising construction costs and rising interest rates), the lack of land in the city of Valencia, the long administrative processes for building permits, low salaries, etc.
With regard to renting, the predictions of this Housing Observatory, which anticipated a drastic reduction in supply when the Housing Law passed this year came into force, have also been fulfilled. From January 2021 until now, the number of homes has fallen to such an extent that there are now less than 60% of those that existed just three years ago.
As a consequence of all this, there has been a shift from long-term (traditional) renting to renting for less than 12 months, in order to avoid the application of this law. Prices are still very high, averaging over €1,500, the highest in Spain after Madrid and Barcelona.
The shortage of supply, together with the constant pull effect of the quality of life and the good professional expectations for international companies and investors in the city are responsible for this situation.
Furthermore, the question is what happens to the thousands of international students that arrive at the universities every year, whose accommodation costs are beginning to be a cause for concern, and may even affect their choice of final destination. And, most worrying of all, the very low incomes and migrants with fewer resources, who without any possibility of regulated accommodation move to informal settlements.
However, for years the Housing Observatory Chair of the Universitat Politècnica de València, has been proposing the most obvious necessary solution: the construction of subsidised housing - which would help to reduce the tension in prices and, above all, would allow access to housing for those who now find it impossible (young people and those on middle and low incomes).
We are currently hopeful because the regional administration has listened to the proposals launched by this Chair, which consist of generating the regulatory support to mobilise public land through public-private collaboration and to make housing available for social rent, but also for sale; the formulas of surface rights and those of acquisition by exchange will allow us to expand our housing stock without public decapitalisation, thus alleviating prices and opening up a solution for housing for those who need it most.
The situation is therefore complex. But we anticipate hopeful times ahead, with the emergence of subsidised housing developments in the coming months which, together with other administrative measures, could reverse the trend.