On October 29, 2024, a Dana (Isolated Depression at High Levels) hit Valencia, causing severe floods and damage. This event reshaped the real estate market, affecting prices, financing, and profitability. In such a scenario, hiring a specialised lawyer is crucial, especially for foreign investors.

Impact of the Dana on Valencia’s real estate market

  • Property price fluctuations

The Dana has caused a dual trend:

Affected areas: properties in flooded zones, like areas near the Turia river, have seen a 15-20% drop in value.

Safe areas: neighbourhoods such as Ruzafa have experienced a 5-10% price increase due to rising demand.

Practical example: a 90 m² flat in a flood-prone area might drop from €250,000 to €210,000, while in a safe zone, it could rise from €280,000 to €310,000.

  • Financing and profitability

- Evolving mortgage conditions

- Banks have tightened lending policies in risky zones, raising interest rates by 0.5-1%.

- Comprehensive insurance policies, costing €1,500-2,000 annually, are now mandatory.

  • Impact on rental yields

- In affected areas: Reduced rents lower yields.

- In safe areas: Higher demand boosts rental income and profitability.

The lawyer’s essential role

  • For foreign investors

- Legal and tax guidance: ensuring compliance and optimising taxes.

- Contractual protection: safeguards against hidden risks.

  • For all investors

- Legal security: ensuring all permits are valid.

- Problem-solving: dressing disputes and unexpected issues.

Conclusion

The Dana has reshaped Valencia’s real estate market. Working with a specialised lawyer is not just a safeguard but a strategic move to maximise returns and ensure smooth, secure investments.