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.
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