The purchase and sale of housing in Spain by foreigners grew by a slight 0.5%, in comparision to the previous year, in the second half of 2019 to over 50,500 transactions, according to notaries in Spain, for an average price of 1,801 euros/m2. Among the foreigners investing in property in Spain, the British, French and Moroccans had a greater weight in transactions, but it was the Swedes (2,490 euros/m2), Swiss (2,486 euros/m2) and Germans (2,320 euros/m2) who paid more on average for their homes purchased in Spain.
The transactions made by these foreign buyers represented 18.7% of total housing sales in the last six months of last year, maintaining the average of foreign purchases between 2012 and 2018. Above this average in the second half of the year are the Balearic Islands (37.1%), Valencia (34%), the Canary Islands (30.2%), Murcia (29.2%) and Andalusia (19%), which also accounted for 77% of total purchases by foreigners during this period.
Of the total transactions, 57.7% were by foreign residents, while the remaining 42.3% were by non-residents, according to the Consejo General del Notariado (General Council of Notaries) for the second half of 2019.
On average, foreigners paid 3% more for the houses they bought between July and December, accumulating four consecutive semesters of increases, to stay at 1,801 euros/m2, although non-resident foreigners (2,220 euros/m2 on average) paid higher prices than residents (1,457 euros/m2 on average), very much in line with the average expenditure of national buyers of 1,451 euros/m2.
The most expensive properties purchased by expats were located in the Balearic Islands (3,174 euros/m2), Madrid (2,359 euros/m2), Catalonia (2,099 euros/m2), the Basque Country (1,955 euros/m2) or Andalusia (1,862 euros/m2).
The British bought the most properties, despite falling more than 12%
By nationality, the British (13.2%) continued the trend of recent years and continued to have the greatest weight over the total number of sales made by foreign citizens. On this occasion, they were followed by the French (8.3%) and Moroccans (8.0%), who overtook the Germans (7.8%).
It is also worth noting the year-on-year increase in sales in these six months by foreigners from Morocco (19.6%), Ecuador (17.8%) and Denmark (11.7%), while those who fell the most were from the United Kingdom (-13.2%) and China (-9.7%), which in 2019 as a whole dropped somewhat less, 12.7%, after recovering in 2018. Even so, the British continue to be the main foreign buyer in Spain.
Swedish buyers (2,490 euros/m2), the Swiss (2,486 euros/m2), Germans (2,320 euros/m2) and Americans (2,305 euros/m2) were the ones who paid the highest average price. "These are nationalities with a higher proportion of non-residents than residents, who pay higher prices," the notaries say in their report. On the other hand, Moroccans (697 euros/m2), Romanians (973 euros/m2) and Ecuadorians (1,210 euros/m2) paid the lowest average prices during this semester.
Banco de España: "The increase in the resident foreign population may have contributed to raising prices"
Banco de España (the Bank of Spain) has analysed the evolution of foreign investment in the Spanish residential property market over the last decade with data from the General Council of Notaries, the National Statistics Institute (INE) and the Ministry of Transport, Mobility and the Urban Agenda (MITMA), in which it has attempted to evaluate the impact of foreign investment on housing prices in Spain.
"The high correlation between housing price growth and population growth suggests that the increase in the number of foreign residents in certain provinces, especially on the islands, may have contributed to higher housing prices through its effect on demand for property. However, no evidence is found in the hypothesis that investment by non-resident foreigners has contributed to the increase in housing prices over the last few years", states the Bank of Spain in its report.