The role of foreign demand in Spain’s housing market has not only remained significant but has also solidified itself as a crucial pillar of the industry. Despite a 7.5% decrease in international transactions in the first half of the year, amounting to 67,983 transactions, this decline is relatively less significant compared to the decrease in Spanish national purchases, which has been influenced by successive interest rate increases and the consequent rise in financing costs. Remarkably, foreign participation in the Spanish property market has grown stronger, even amidst these economic fluctuations.
According to notary and registrar data, international purchases in the first half of the year constituted an impressive 21% of total property transactions, a record high. Furthermore, in the third quarter, foreign buyers accounted for 15.4% of all operations, representing their second most active quarter since records began, aligning with peak tourist seasons.
Detailed analysis by the Association of Registrars shows that foreign property purchases in Spain reached a peak not seen since 2022, when they accounted for 16% of the market between July and September.
FOREIGN BUYERS IN SPAIN: BRITISH, GERMANS AND MOROCCANS, ON THE PODIUM OF TRANSACTIONS
Breaking down the numbers, British nationals led the pack in foreign home purchases during the first half of 2023, representing 9.6% of the total with 6,498 transactions. They were closely followed by German and Moroccan buyers, with significant contributions also coming from French, Italian, Romanian, and Dutch nationals. Non-EU foreigners collectively made up 12.8% of the transactions, as noted by the notaries. During this period, there was a notable increase in purchases by Russians (50.2%), Ukrainians (41.6%), and Americans (13.6%), a trend possibly influenced by geopolitical events.
The regional preferences of these foreign buyers vary. British buyers show a strong preference for Andalusia, Valencia, and, to a lesser extent, Murcia. Germans are more inclined towards Catalonia, the Balearic Islands, the Canary Islands, Valencia, and Andalusia. The French mainly opt for Catalonia, followed by Valencia and Andalusia.
Moroccans, Italians, and Belgians have distinct preferences, with a common inclination towards Catalonia, the Region of Valencia, and Andalusia.
Looking at the broader picture, the Balearic Islands, the Valencian Community, the Canary Islands, Murcia, Catalonia, and Andalusia are the Autonomous Communities with the highest percentages of foreign purchases in the third quarter. Provincially, Alicante, Santa Cruz de Tenerife, Malaga, the Balearic Islands, Gerona, Murcia, and Las Palmas lead in foreign property buying activities.
On the other end of the spectrum, regions like Extremadura, Galicia, and Castilla y León have seen the least demand from foreign buyers.
Swedes are at the top in terms of spending, paying the highest average price per square metre in Spain, which stands at 3,036 euros/m2. Following them are Danes, Americans, Swiss, Germans, and Norwegians. Other nationalities such as Russians, French, Italians, Dutch, Belgians, and Irish also surpass the overall average price paid by foreigners. Contrastingly, Moroccans, Romanians, and Ecuadorians are among those paying the lowest prices per square metre for properties in Spain.