The Valencia housing market performed well in 2022, withstanding pressure from a whole range of crisis factors, including inflation, rising construction costs, rising mortgage lending rates, the energy crisis and a shortage in the labor market. All this, as well as the general uncertainty in the prospects for the development of the global economy, has crippled many markets, but Valencia was able to record several quarterly sales and price increases at once, including setting a record in the volume of housing transactions in the third quarter of 2022.
Like many housing markets that have shown growth in the past year against all odds, Valencia relies heavily on huge demand from foreign buyers, investors and companies. It was foreigners who became the main source of income for the sector, they accounted for both the most expensive purchases and the bulk of transactions in the market in general. An international buyer is looking for promising investment assets and second homes for housing, paying special attention to new real estate and real estate under construction.
Let's turn to specific figures. Foreigners accounted for 78.8% of all second home buyers in Valencia in 2022. Citizens of EU countries accounted for a share of 44.4%. Buyers outside the European Union accounted for a share of 34.3%. Spanish buyers accounted for only 21.11%, according to a study conducted by the associations FAI and Asicval.
As part of their research, 494 real estate market specialists were interviewed, 100 of whom represented Valencia. The respondents indicated that foreigners also dominate investments. They accounted for 70.1% of housing investment transactions in Valencia. The 36.1% share was retained by investors from countries outside the EU. EU citizens accounted for a share of 34%. Spaniards accounted for a share of 29.8%.
There are three main categories of buyers, if we break down foreign demand into parts. Last year, up to 68.7% of buyers purchased their first foreign home as their main place of residence. Their choice fell on Spain and this is 3.9% more than was recorded in 2021. In search of a second home, another 21.2% of buyers arrived in Spain — this is a decrease by the indicators of 2021. 10.1% of foreigners bought housing for investment — a decrease of 1.7% by 2021.