Spanish property to buy
The purchase and sale of Spanish properties by foreigners grew by a slight 0.5% year-on-year in the second half of 2019 to exceed 50,500 operations, according to Spanish notaries, at an average price of 1,801 euros / m2. The British, French and Moroccans had a greater weight on real estate transactions, but it was the Swedes (2,490 euros / m2), Swiss (2,486 euros / m2) and Germans (2,320 euros / m2) who paid the most on average for their Spanish property.
The operations carried out by these foreign buyers represented 18.7% of total home sales in the last six months of last year, maintaining the average of foreign purchases between 2012 and 2018. Above this average for the second half of the year, they find the Balearic Islands (37.1%), the Valencian Community (34%), the Canary Islands (30.2%), Murcia (29.2%) and Andalusia (19%) that also accounted for 77% of the total purchases made by foreigners during this time.
Of the total operations, 57.7% of them were carried out by resident foreigners, while the remaining 42.3% were from non-residents, according to the General Council of Notaries for the second half of 2019.
How much do foreigners spend to buy Spanish property?
On average, foreigners paid 3% more for the houses they bought between July and December, after two years of increase, to stay at 1,801 euros / m2, although non-resident foreigners (2,220 € / m2 on average) paid higher prices than residents (€ 1,457 / m2 on average), very much in line with the average cost of national buyers of 1,451 euros / m2. A foreign resident is someone paying tax in Spain and being registered as a Spanish resident, not just holding a NIE.
The most expensive homes bought by foreigners were located in the Balearic Islands (€ 3,174 / m2), Madrid (€ 2,359 / m2), Catalonia (€ 2,099 / m2), the Basque Country (€ 1,955 / m2) or Andalusia (€ 1,862 / m2) ).
Who buys Spanish property?
The British are those who bought the most properties despite falling more than 12%, probably due to Brexit. By nationalities, the British (13.2%) maintain the trend of recent years and continue to have the greatest weight over the total number of purchases made by foreign citizens. Once Brexit is fully-consumed end 2020 we expect to see the Brits come back in force. This time they are followed by French (8.3%), Moroccans (8.0%), who outrank the Germans from the podium (7.8%).
We see in these six months, foreigners from Morocco (19.6%), Ecuador (17.8%) and Denmark (11.7%) stand out, while the ones that fell the most were those of the United Kingdom (-13.2%), China (-9.7%), and which in the whole of 2019 fell slightly less, 12.7% after recovering in 2018. Even so, the British are still the main foreign buyers of property in Spain.
Swedish buyers (€ 2,490 / m2), Swiss (€ 2,486 / m2), Germans (€ 2,320 / m2), Americans (€ 2,305 / m2) were the ones that paid the highest average price. “They are nationalities with a higher proportion of non-residents than residents, who pay higher prices,” confirm the notaries in their report. On the contrary, Moroccans (€ 697 / m2), Romanians (€ 973 / m2) and Ecuadorians (€ 1,210 / m2) paid the lowest average prices during this semester.
Spanish property price
The Bank of Spain said: “The increase in the resident foreign population could have contributed to raising prices of Spanish properties.”
The Bank of Spain has analyzed the evolution of investment by foreign citizens in the Spanish residential property market in the last decade with data from the General Council of Notaries, the National Statistics Institute (INE) and the Ministry of Transport, Mobility and Agenda Urbana (MITMA), in which they have tried to assess the impact of foreign investment on house prices in Spain.
“The high correlation between the growth of housing prices and the increase in population suggests that the increase in the number of residents of foreign origin in certain provinces, especially with islands like Mallorca and Ibiza, would have contributed to raising housing prices through its effect on the demand for real estate. However, there is no evidence in believing that the investment of non-resident foreigners has contributed to the increase in the price of housing in Spain in recent years, “states the Bank of Spain in its report.
For buying Spanish property costs in 2020, feel free to contact our team at email@example.com but expect on average around 10-12% in buying Spanish property costs. You need to add this to the property price to pay and when you buy a new-build Spanish property this includes the 10% VAT. Happy to explain all your options during our inspection trips.