How much money do foreigners buying homes in Spain invest in the Spanish property market? And which foreigners spend the most money in Spain?
Home purchases by foreigners in Spain recorded a 26.3% reduction in 2020 compared to 2019, down to 46,303, far from the historical series high of 65,416 achieved in 2018. Specifically, the drop compared to the record of two years earlier reaches 30%. But who buys the most expensive properties in Spain?
A report published by the Real Estate Agents (API) and FIABCI Spain states the figure for 2020 is close to levels similar to 2014 and is well above the years of the previous crisis. Despite the double-digit year-on-year fall, in relative terms home purchases formalised by foreigners in Spain accounted for 11.32% of the total, a slight reduction of 1.13 percentage points compared to the previous year, maintaining the downward trend of recent years, from the peak of 13.25% in 2016. "Despite this decline, taking into account the special circumstances of the pandemic, they represent very significant figures for foreign demand," the study stresses.
The autonomous communities with the highest number of home purchases by foreigners during 2020 were the Valencian Community (13,493), Andalusia (9,443), Catalonia (7,748) and, further down the list, the Canary Islands (3,841), the Balearic Islands (3,146), the Community of Madrid (2,761) and Murcia (2,617), with the rest remaining below 1,000 annual purchases. All the autonomous regions in Spain recorded sharp annual decreases, with double-digit rates in all cases.
The foreigners who bought the most homes in Spain in 2020 were the British, who accounted for 13.05% of the total, followed by the French (8.16%), Germans (7.75%), Moroccans (6.74%), Belgians (6.39%), Romanians (5.53%), Italians (5.08%), Swedes (4.63%), Dutch (3.32%) and Chinese (3.08%).
The upward trend in prices continues
According to the study, the average price of home purchases by foreigners was 1,791 euros per m2, with an annual increase of 3.6%, continuing the upward trend of previous years.
The average price per nationality was led by Swedes (5,322 euros per m2), Germans (4,668 euros) and Norwegians (4,662 euros). In terms of the surface area of the flats, 35.9% were larger than 100m2, 20.26% were between 80 and 100m2, 24.7% were between 60 and 80m2, 14.83% were between 40 and 60m2 and 4.32% were less than 40m2.
Fall of 17.8% in the number of mortgages taken out by foreigners
In addition, the number of mortgages taken out in Spain by foreigners was 19,177, with a decrease compared to 2019 of 17.8%, the year in which the maximum of the historical series was reached (23,342 mortgages).
This number of mortgages accounts for 5.63% of the total, giving rise to a much lower representation than that achieved in total home purchases (11.32%), which makes clear the lower need for financing by foreigners for the acquisition of residences in Spain.
The highest average mortgage amounts by nationality corresponded to Germans (245,775 euros), Swedes (229,907 euros), Dutch (191,015 euros), British (190,644 euros), French (181,107 euros) and Norwegians (174,815 euros).