Foreign Investment In Spanish Property
Growth in enthusiasm for Spanish property amongst overseas buyers continued in the latter months of last year, with the final quarter of 2017 seeing 24,275 international sales, an increase of 13.3% on the previous year. Sales to foreign buyers now represent more than 17% of total property purchases in Spain.
There were 60,800 homes in Spain acquired by foreigners last year, based on sales inscribed in the Spanish Land Register and analysed in the annual housing market report published by the Registrars. Interesting to consider is the shift in demand amongst investors from various countries. Danish buyers, for example, are ranked number 10 in terms of interest shown in property investment in Spain, yet a leading property website has seen an increase in enquiries from Denmark of almost 50%.
Interest from the United States has also seen a surge of over 40% and Sweden 34.5%. On the other hand, interest from Germany, whilst still up by just over 15%, hasn’t risen as significantly and Swss buyers, who are currently ranked number 9 on the scale of regular investors have increased their volume of enquiries by just 4.3%.
It has to be noted that, despite Brexit, British investment still accounts for some 27.4% of total enquiries, against 62.3% from the rest of Europe and 10.3% from the rest of the world. Overall foreign demand increased last year despite a decline in the dominant British market. UK buyers, nonetheless, still represent 15% of completed sales on the Spanish market and withdrawal from the EU has had a relatively subdued impact on demand from the UK, at least in terms of volume. The overall British market in terms of value, however, is likely to have declined by more as many UK investors have lower budgets due to the weaker pound and consequent reduction of spending power in Spain.
In terms of property value, Mallorca has performed very well for its investors with house prices increasing by 4.8% in the last three months and a huge 21.3% over the last year. Malaga and Fuerteventura are also showing a healthy 2.3% and 2.2% rise in value respectively, whilst Adeje in Tenerife has seen property prices fall by 5.2% during the last three months. Values in Barcelona are also down 3% over the same period. There was a slight decline in foreign market share from 13.25% of the housing market in 2016 to 13.11% in 2017, but this can be attributed to the fact that local demand grew faster than that from overseas investors.
The Spanish property market was at its lowest in 2009 when foreign demand fell to just 4.24% but has been showing a healthy rate of growth year-on-year since then and looks set to continue in a relatively gentle, upward curve, without the dramatic highs and lows seen almost a decade ago.