The number of houses bought by non-Spanish people in Spain exceeded 60,800 in 2017, breaking the record set 10 years ago, according to official statistics. The drop in the number of purchases by Brits thanks to the Brexit effect was offset by Germans, French and Belgians. Holiday homes remain the main attraction for foreigners, with Alicante and Santa Cruz de Tenerife having the greatest relative weight in terms of sales figures. Ex-pat buyers prefer houses of more than 100 m2 (1076 sq ft) and they are mortgaged more and more.
Spain continues to attract foreign investment in property, more than anything because of its tourism based on the sun and the beach. The purchase of houses by foreigners has not stopped growing in the country since 2009, when it reached its lowest level. Levels went from barely 16,000 property transactions then to more than 60,000 last year, the first time in history, according to the Real Estate Registry Statistics Yearbook of the Association of Property Registrars.
In spite of this new record, the purchase of homes in Spain by foreigners lost a relative weight on the total number of operations, going from 13.25% in 2016 to 13.11% in 2017, but consolidated the importance of transactions by citizens of other nationalities. "Foreign demand has become one of the factors that has contributed most to the recovery of the Spanish real estate market," say the registrars.
The British, the only ones who have gone down
By nationality, us British are losing relative weight although there’s still a big difference from other nationalities. The Brexit effect has caused Brits to buy fewer houses than in 2016, with fewer than 9,200 transactions, and a 10% drop compared with the previous year, when they set a record.
This decline in transactions by the British has been offset by the other nationalities, all of which have grown. The French recorded nearly 5,300 purchases and increased their weight to 8.6% of total foreign purchases. They are followed by the Germans (7.7%), with around 4,750 purchases; Belgians (6.4%), with 3,900 operations; and then Swedes (6.3%), Italians (5.7%) and Romanians (5.3%).
"These nationalities are exactly the same as the ones that have been occupying the top positions in recent years, with a remarkable consistency in the demand for housing in Spain in terms of nationalities," the registrar's report points out. "Everything seems to indicate that there may be a certain degree of recovery or, in any case, that levels with the British demand will be upheld, which could contribute positively to the favourable real estate cycle in which housing demand is found."
Properties by the sea, the preferred choice for foreigners
In all the autonomous communities on the Mediterranean coast and both archipelagos, the number of house purchases by non-Spaniards has increased. The Canary Islands (31.3%), the Balearic Islands (31.2%) and the Valencian Community (26%) were the main places they invested in 2017. Of these, the Canary Islands was the most popular, where the relative weight increased. That’s followed by Murcia (18.7%), Andalusia (13.8%) and Catalonia (12.9%).
"All these places have a high degree of coastal tourist attraction, which fits perfectly with the structure of nationalities demanding housing in Spain over the last few years," according to the registry.
In the provinces of Alicante (40.76%) and Santa Cruz de Tenerife (40.72%), the weight of foreign purchases is almost equal to that of Spanish nationals. They are followed by the Balearic Islands (31.2%), Girona (30.7%), Malaga (29.6%), Las Palmas (22.3%), Murcia (18.7%), Almeria (16.8%), Tarragona (14.4%) and Castellón (14%).
In Andalusia and the Valencian Community, British, Swedish and Belgian ex-pats were the ones who bought the most houses. In Catalonia they were French, Chinese and Italian; in the Balearic Islands, German, British and Italian; and in the Canary Islands, Italians, British and Germans.
The type of house: the greater the purchasing power, the larger the house
While it’s true that, in general, ex-pats also buy used homes, just like Spaniards usually do, there are nationalities that prefer to buy new homes. By numbers, the Belgians are first with 26.6%, followed by Norwegians (23.9%), Swedes (19.6%), Russians (19.3%) and Dutch (18.1%).
If we look at the size, the average property bought by ex-pats is around 60 to 90 m2 (650-950 sq ft), although by nationality we can see that the greater the purchasing power, the more possibilities there are to buy a larger house of more than 100 m2, or 1076 sq ft.
Dutch (48.2%), Danes (46%), Swiss (43.7%), Germans (36.3%), British (36.3%) and Norwegians (35.3%) are the ones who buy the most houses of this size, most of them being second homes or holiday homes on the coast.
Those who buy properties of 60-80 m2 (650-850 sq ft) and 80-100 m2 (850-1076 sq ft) tend to do so as a main residence rather than a second home. Here it is more Romanians, Algerians, Moroccans or Bulgarians who are in the top positions. Then there is another type of smaller touristic property, apartments of less than 40 m2 or 430 sq ft, where Italians, Poles, French and Irish are the ones who buy the most.
In the last year, the percentage of property purchases of more than 500,000 euro by overseas buyers has increased, from 5.32% in 2016 to 5.72% last year, of which 37.5% are by those fro outside the EU, who can benefit from the Golden Visa, the residence permit for foreigners who made real estate purchases in Spain for an amount equal to or greater than 500,000 euro.
Mortgages for ex-pats increased: work outstrips leisure
Despite the growing number of non-Spaniards in the housing market, they are still scarce in the mortgage market. In fact, while 13% of the total purchases were made by foreign nationals, they accounted for only 6.8% of the mortgages signed in the country.
Curiously, the relationship between sales and mortgages by nationality is not uniform. For example, although the British make up the greatest percentage in terms of property sales, we are not the ones who take out the most mortgages in Spain.
The nationality that contracts the most mortgages in Spain are Romanians, with 11.5% of the loans signed, while they are the seventh largest buyers. Second are the British (9.3%), followed by the Chinese (8.4%) and Italians (5.7%). Except for the British, they are nationalities that hold mid-level positions in terms of transactions.
"The nationalities leading the way in property purchases in Spain are characterised by high levels of per capita income, meaning they have less need for financing, as can be seen in the results of taking out mortgages on housing," the registrars conclude.