The Valencian real estate market is going through a significant slowdown after home sales fell by 35.8% year-on-year in May. The Valencian Community recorded one of the sharpest declines in Spain, in a context marked by high property prices, tighter mortgage lending conditions and a persistent imbalance between supply and demand. Today, from Quinta Avenida, we take a closer look at the situation and the factors behind this change in the real estate market.
The Valencian real estate market records a sharp decline in sales
In May, home sales in the Valencian Community fell by 35.8% compared with the same month of the previous year, with 6,506 transactions recorded. This decline was considerably greater than the 11.8% drop recorded across Spain as a whole.
The figures point to a significant change in the activity of the real estate market, particularly after several years of strong demand and growth.
The Valencian Community is not the only region experiencing a slowdown. Other areas also recorded significant declines, including the Balearic Islands, with a 20% drop, Cantabria, with 19%, and Asturias, with 17%.
At national level, home sales have now recorded eight consecutive months of year-on-year declines, a trend that began in October 2025.
Tighter mortgage lending is affecting homebuyers
One of the main factors behind the evolution of the Valencian real estate market is the tightening of access to financing.
According to data from Spain’s General Council of Notaries cited in the report, financial institutions granted almost one-third fewer mortgages nationwide in May compared with the same month of the previous year. In the Valencian Community, mortgage operations fell by 26.1%.
Banks are applying stricter criteria when assessing applications for home financing, paying particular attention to employment stability, existing debt, savings capacity and applicants’ previous financial behaviour.
This situation can make it particularly difficult for young people and families with lower incomes to access housing, as high property prices are combined with greater difficulties in obtaining financing.
Property prices remain under pressure
The decline in transactions is taking place while housing prices remain high. Demand has not disappeared, but there is a growing imbalance between the number of properties available and the needs of potential buyers.
This creates an important paradox: even though fewer property sales are being completed, prices do not necessarily fall at the same rate because demand remains significant while supply is limited.
The situation is particularly relevant in the Valencian Community, where rising home prices are making it increasingly difficult for some buyers to enter the market, while buyers with greater financial capacity continue to operate.
The Valencian real estate market faces a supply and demand imbalance
The current situation shows that a decline in home sales does not necessarily mean that interest in purchasing property has disappeared.
Instead, the Valencian real estate market continues to face a structural shortage of homes. Demand remains present, but high prices and tighter financing conditions are limiting the purchasing capacity of part of the market.
The Valencian Community also has the highest proportion of mortgaged residents in Spain, with 46.7% of its population having an active mortgage debt, according to the figures cited by the article. Furthermore, one in three indebted households in the region spends at least 30% of its monthly income on mortgage repayments.
These figures highlight the significant impact that the cost of housing currently has on Valencian households.
What could happen to the Valencian real estate market?
The evolution of the real estate market over the coming months will depend on several factors, including the development of property prices, access to credit and the market’s ability to increase the available housing supply.
If prices remain high while financing continues to be restrictive, some potential buyers may postpone their property purchases.
At the same time, continued demand could limit any potential correction in home prices, particularly in areas where the supply of properties remains limited.
The current situation can therefore be interpreted as a period of adjustment in the real estate market, rather than the disappearance of demand.
The future of housing in Valencia
The current figures underline one of the main challenges facing the Valencian real estate market: ensuring that enough homes are available to meet demand while making them accessible to a wider range of buyers.
The combination of high property prices, tighter mortgage conditions and a structural shortage of housing is creating a more challenging environment for buyers.
Young people and households with lower purchasing power are among those most affected, while the future development of the market will depend on how prices, financing and housing supply evolve.
Conclusion
The Valencian real estate market has experienced a significant decline in home sales, with transactions falling by 35.8% in May, well above the national decline of 11.8%. High housing prices and tighter mortgage lending conditions are making it more difficult for some buyers to access the market, particularly young people and households with lower incomes.
However, the market continues to be shaped by a shortage of homes and persistent demand. The evolution of prices, financing conditions and housing supply will be key to understanding how the real estate market develops over the coming months.
At Quinta Avenida, we will continue to follow the latest developments in the real estate market, property prices and the opportunities emerging for buyers and property owners.
If you are looking to sell, buy or rent a property, or if you have any questions about the real estate market, feel free to contact us or visit Quinta Avenida’s website.
