Falling sales do not dampen foreigners' appetite for buying a home in Spain

New official data confirms the fall in property transactions during 2023. On this occasion, the Land Registrars closed last year with a decrease of 9.8% compared to 2022. This represents 583,042 transactions registered in Spain, the second-best figure in the Register Statistics since 2007, only exceeded by the extraordinary performance of 2022.

Property buying trends in Spain

Second-hand property transactions accounted for 81.4% of the total volume, with 474,658, representing a year-on-year decrease of 10.7%. On the other hand, 108,384 new-build transactions were recorded, with a reduction of 5.5%.

After the outstanding results achieved in 2021 and particularly 2022, the past 2023 marks a slowdown, although it situates the property market at levels similar to those reached in the years before the health crisis.

"Over the next few quarters, this slowing trend in the rate of home purchases is expected to continue, but within levels that could be classified as normal, exceeding ten sales per thousand inhabitants per year, having recorded a result of 12.03 in 2023," the Registrars emphasise.

"The main factor with an unfavourable impact, such as the rise in interest rates, has concluded its upward trend, with the evolution of economic activity and its impact on employment being particularly relevant for the future behaviour of sales," they specify.

Foreign house purchases account for around 15% of the total

However, this slowdown in transactions and interest in buying a home in Spain was barely felt among the foreign (resident and non-resident) population. Transactions by foreigners had very similar behaviour to 2022, after falling by only 1.7% year on year and recording around 87,400 transactions, according to the aggregate data by quarter of the Registrars calculated by idealista/news.

These calculations – ahead of the Yearbook of Real Estate Registry Statistics, which the Registrars will publish in March – confirm that foreign buyers are enjoying an outstanding momentum in the Spanish residential market. The absolute number of transactions is the second-highest figure in historical records, only surpassed by 2022 (88,858). However, the weight of these foreign purchases in the total volume of transactions reached its maximum in 2023, with 15% of the total, improving this time in 2022.

These last two years have been much higher – overall and in terms of the percentage of transactions compared to the pre-pandemic period, with some 20,000 more transactions and almost three points higher.

The Valencian Community confirms its position as foreigners' region of choice

In these calculations made by the autonomous community, the Valencian Community is the region with the highest number of transactions in 2023, with nearly 28,000 house purchases by foreigners. This represents over 29% of the volume of transactions in the autonomous community and more than three out of every ten house purchases in Spain.

Behind Valencia, Andalusia stands out, with just over 17,500 transactions, and Catalonia, with almost 15,000. A little further behind are the Canary Islands, with more than 7,000 transactions; the Balearic Islands and Murcia, both with more than 5,000, and Madrid, with almost 4,500.

In these regions, the weight of foreign homebuying has also been significant, as in Andalusia and Catalonia, both above 15%, but ahead of Murcia, with almost one in four transactions involving a foreigner. Given the high total volume of transactions in Madrid – with more than 70,000 in 2023 – the weight of foreign purchases is not as important at just over 6%.

However, foreigners have greater importance in the domestic market on the Balearic Islands, overtaking the Valencian Community in this case. Over 30% of sales on the Balearic archipelago are made by foreigners, whether or not they are residents. The Canary Islands would enter the trio of regions where these transactions by foreigners have the greatest weight.

According to calculations based on quarterly information from the Registrars, the weight of foreign home buying has grown in all autonomous communities, without preventing transactions from falling but demonstrating their interest in owning a home in Spain.

English, Germans and French remain the leaders, but other nationalities are on the rise

Citizens from the UK, Germany and France continue to be the main foreign homebuyers in Spain. The British accounted for one out of every ten transactions by foreigners, exceeding 8,000 purchases in 2023. Behind them, Germans exceeded 6,000 transactions on Spanish soil, surpassing 7% of the foreign purchase volume. Meanwhile, the French are close to these 6,000 transactions with just under 7% of the total.

Behind them, Moroccans, Belgians, Italians, Romanians and Dutch bought between 4,000 and 5,000 homes, respectively, with values between 4.5% and 5.5% of the total transactions among foreign nationals.

Polish, Russian, Chinese and Ukrainian nationals were particularly notable, as were North Americans, who this year may have broken their own record with more than 1,300 transactions in Spain.