Valencia has been the fastest growing mayor city in Spain during the last three consecutive years
Valencia property price inflation has not been as dramatic as that witnessed in all other major cities in Spain. According the Spanish Association of Real Estate Valuators prices in Valencia City have experienced an increase of 517% since 1985 as opposed to an increase of 914% in Barcelona or an increase of 618% in Madrid during the same period.

The consequence of this lower inflation is evident if we look at prices paid per square metre today for second hand flats in rival city centres.

                               City Average price in city centre (January 2006)

House Prices in Valencia were 55% lower than in Barcelona in 2004 and are still 35% lower in 2006. In fact, no other city in Spain with more than 500,000 inhabitants has lower prices per square metre.
This information is especially relevant if we consider that Valencia is Spain’s third largest city, and that, according to the Chamber of Commerce, contributes with 10% to Spain’s GDP. Furthermore, since 1981, the population of Valencia has grown 14%, a much higher figure than Spain’s average of 8,4%, according to Spain’s National Statistics Office. Valencia’s benign climate together with all the leisure and culture activities it has to offer is sure to be largely responsible for attracting this greater influx of population. Mainly young people and immigrants that have found work in Valencia as a result of its economic growth, and retired people from other parts of Spain and northern Europe seeking a milder climate, healthier life, leisure and cultural enrichment.
As expected, the property market is reacting to this evidence and in 2005 and for the third consecutive year Valencia has come on top as the highest growing-in-price property market.

Finally, two mayor banks operating in Barcelona and Valencia: Caixa Catalunya and Bancaja have come up with an interesting report evidencing that there are over 1,2 million flats in Spain built prior to 1920 that require immediate renovation. And that there are a further 2,6 million flats built between 1921 and 1960 that will require substantial renovation within the next few years. Precisely the type of properties Spanish Equity targets for its acquisitions.

The graph below shows the percentage increase in property prices for resale homes in Spain's major capital cities in the last three years.