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Friday, July 11th, 2014

The Valencian Community leads the way in property sales to foreigners

On July 7, an event was held in Madrid, dedicated to analysing the economic impact in Spain and the Valencian Community of the acquisition of property by foreigners. The day was organised and promoted by the Valencian regional government, la Generalitat, via the “Comisión para el análisis, impulso y reactivación de la actividad productiva y el empleo mediante el incremento de la adquisición, arrendamiento y uso de viviendas por ciudadanos del resto de Europa” (Commission for analysing, incentivising and reviving productive activity and employment, through an increase in acquisition, rental and use of property by citizens from the rest of Europe).

The event took place due to the importance of foreign investment in the housing sector, both at a national level and also within the Valencian Community. At state level, investment in property (including apartments, villas, hotels, office buildings, shopping centres and bank branches) reached €6.6 billion in 2013, a third of the total foreign investment in Spain last year. These statistics are mirrored in the Valencian Community, which, with 33.6% of the market quota, had the highest sales of property to foreigners, far beyond other autonomous communities such as Andalusia (19.9%) and Catalunya (15.5%). 2009 represented a turning point in the property sales curve, and was the year in which 7,473 real estate transactions were carried out. Since then, this number reached 16,619 towards the end of 2013.

Amongst the most active nationalities acquiring residential property in our country are the British (15.2%, comparatively half that compared to in 2009) French, Russians and Germans. Following real estate acquisitions between 2009 and 2013, there has been a significant increase in the number of Belgians, Swedish and Norwegians present in Spain. Numbers of Chinese people in Spain are still far from reaching the highest figures relating to property acquisition, but they are gradually on the rise. The Chinese represent a spectrum of clients who are potentially interested in acquiring exclusive property following the passing of the Entrepreneurship Law, which allows investors who (among other possibilities) opt to buy a property for the value of €500,000 or more, to obtain a visa and, thereafter, a residency permit. The visa and permit can be extended to spouses, and children under the ages of 18, and allows the holder to move freely between countries which have signed the Schengen Agreement. For these reasons, it is very likely and expected that, in the near future, it will lead to an increase in transactions from China, as well as other countries interested in the advantages offered by this recently-implemented law.

In relation to the rise in sales of real estate to foreigners, both on a national level and within the Valencian Community, it is worth highlighting that between 2012 and 2013, Rimontgó experienced an increase in operations by 17%, a figure which represents an 4.5% rise in the company’s total sales volume. Spain’s attraction as a country for foreign investment in real estate is also reflected in our own Valencian Community, thanks to factors such as the quality of residential properties, and the lack of overcrowding in places on the Costa Blanca which attract international interest, such as Jávea, Dénia, Altea and Moraira. To these areas, we must also add the city of Valencia itself, together with its surroundings urban areas, such as Monasterios, Campolivar and Santa Bárbara, in order to build up a map of the most privileged areas for buying exclusive properties.

The profile of those investing in high-quality real estate is varied. On the one hand, there are buyers who invest with the idea in mind of making a future profit. On the other hand, while some buyers acquire a high-standard property to act as a second home, others do so in order to fully establish themselves in our country. They all, however, have something in common: the assurance of buying a quality product in privileged areas in our country, such as Valencia and its surroundings, and the Costa Blanca.

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