Real estate market in the communities of Los Monasterios, Alfinach, and Monte Picayo: Balance 2022
To understand how the real estate market has developed in the communities of Los Monasterios, Alfinach, and Monte Picayo in 2022, it is necessary to divide the exercise into 2 parts clearly differentiated by the rate of sales carried out. Up until the summer, the pace has been very potent, taking advantage of the inertia in the real estate market. Since September the pace has been gradually reduced to practically idle at which the market moves nowadays.
At the end of February Russian invasion of Ukraine took place, with devastating consequences, not only for Ukrainian citizens but for the European economy: skyrocketing inflation, raw materials crisis, and energy crisis. This obliges the European central bank to take measures to cool the economies, measures that are highly detrimental to the real estate market since the raise in rate and the consequent increase in mortgage prices announces an inevitable decrease in the number of sales.
The number of sales operations has been considerably reduced in the communities of Puzol from September up to the end of the year. Demand from new clients has fallen precipitously and although we have some pocketed demand for certain products, the slowdown in the market is already a fact.
What can come about in 2023? In 2008 with the fall of Lehman Brothers, the market collapsed because there was a price bubble, which burst when the financial crisis broke out and the mortgage tap was turned off. At that time there were around 200 properties for sale in the communities of Puzol, with high prices and non-existent demand. The market became bearish from 2008 to 2014, the date when financing returned and we begin to recover.
In 2023 no bank has failed and the mortgage tap has not been closed, although it’s certain that it has become expensive and seems it will continue to do so. At present, there is no price bubble, in spite of this it is true that in the last two years, prices have begun to increment in a sustainable way, but we are a bit far from those prices of 2008 year. Demand is weak, but it is true that there are still buyers, especially in the price segment between €300.000 and €600.000, where there is no supply. Presently, in 3 communities of Puzol there are about 100 properties for sale, 30 of them are plots and the lack of properties without significant objections stand out, which fit with the bulk of the demand.
On the other hand, we have a rental market with a meager offer, which could absorb a part of the homes that dominate the sale market if property turnover is slower, as it seems to be. Each year the rental market needs about 30-40 homes. There are currently 7 homes for rent.
Another important aspect is that there are no good plots available, and deadlines for obtaining building permits are slow in Puzol, and very slow in Sagunto. Moreover, the prices of construction materials are on the rise and with some volatility. All this would reduce the demand for self-promotion and would benefit the second-hand villa market.
The lack of land in the community of Los Monasterios is very notable, where there are only 6 plots left for sale and the same happens in Alfinach and Monte Picayo, where there is a little more land left but the supply is very limited as well.
And lastly, the pandemic has hugely favored space and especially the outdoor space, which makes the type properties of the Puzol community, desired product. Hurricanes are coming, but unlike 2008 this time, the real estate market in the communities of Puzol is not sheltered under a straw structure, but rather on something more solid, which will resist the blow of the wind significantly more.
Pau Mollá: Real estate agent specializing in the communities of Alfinach, Los Monasterios and Monte Picayo