Valencia is set to make history, with real estate investment in the region projected to exceed €1 billion for the first time, according to the latest ‘Valencia Vision 2025’ report by Savills. This milestone highlights Valencia’s consolidation as one of the most dynamic property markets in the Mediterranean.
Housing Demand Skyrockets as Supply Tightens
A staggering 84% of this investment will be focused in Valencia city and its metropolitan area. However, the city faces a supply crunch in residential property, pushing house prices up by double digits. The lack of available land and slow urban planning processes have led to a record low in new housing supply.
To address the tension in the market, investors are pivoting towards innovative rental solutions like build-to-rent, flex-living, and new student accommodation. Currently, over 1,490 rental homes are available in Valencia and its outskirts, with an additional 1,385 units slated for delivery in the near future. Nonetheless, the city needs to attract even more investment to triple housing production and ease these pressures, especially with much of the high-end new construction targeting international buyers.
Logistics and Office Sectors Anchor Growth
Valencia’s role as a logistics hub is driving investor interest, with over 800,000 square meters of new space expected by the end of 2026. Despite the upcoming supply, current logistics availability is critically low at under 1%, keeping demand — and rents — high.
The office market is experiencing a similar boom. Led by flexible workspace operators and international technology firms, average office vacancy rates are below 4%. In high-performance buildings, occupancy is close to 95% and could reach 100% by year’s end, with prime rents set to rise to €22–24 per square meter per month for new builds.
Retail Market Shifts and Tourism Soars
Valencia’s prime retail areas are expanding, driven by tourism and strong demand from international brands. Central locations such as the Mercado Colón, Calle Conde Salvatierra, and Calle Sorni are particularly in demand, drawing high-end fashion and lifestyle retailers.
The city’s hotel sector has also surged, with the number of hotels growing by 35% and over 10,000 rooms now available. International tourism has helped sustain a solid annual occupancy rate of 76%, with strong returns for operators despite the increased supply.
Looking Ahead
Valencia’s demographic and economic evolution are transforming its real estate market across all segments. The challenge now is to balance investment-driven growth with solutions to the housing shortage, while continuing to attract businesses, tourists, and international investors.
With over €1 billion poised to flow into Valencia’s real estate market in 2025, the city’s future as a Mediterranean property hotspot looks brighter than ever.
