More foreign buyers are buying property in Spain but the traditional purchasers from the UK are in decline, according to new data from property lawyers.
According to a new report published by Spain’s Notaries the number of foreign buyers increased by 9.8% in 2013 but the proportion of British buyers continued to fall.
Foreign purchasers accounted for 21.4% of all Spanish residential sales or 55,187 transactions in 2013 and it also highlights the areas that are popular with overseas buyers.
A breakdown by nationality showed the number of homes purchased by British buyers accounted for 14.7% of foreign purchases compared to 34.3% prior to the financial crisis in 2007.
Instead, French, Russian, German and Belgian buyers increased in number in 2013, rising by 10.9%, 8.2%, 7.8% and 6.9% respectively.
The Spanish Costas saw some of the largest increases in foreign purchases. Valencia came top, recording a 16.9% increase in foreign buyers year on year, the Canary Islands a 15.7% rise, Andalucía a 15.6% rise and Murcia a 15.2% increase.
The northern regions of Galicia, Castilla y Leon and Navarra recorded the largest falls in foreign buyers, each recorded year on year declines in excess of 20%.
Data for the average price paid by foreign buyers shows they are paying less. It fell 3.8% year on year to €1,486 per square meter.
According to a survey by the Urban Land Institute and PwC the real estate industry in Spain is moving into areas that a year ago would have been regarded as unbelievable. Of the 500 or more expert individuals questioned, 67% agreed or strongly agreed that there are now good buying opportunities in Spain.
‘The report describes this extraordinary turnaround in sentiment towards Spain as ‘one of the most remarkable property stories of this year’s Emerging Trends Europe report.
Chris Mercer, director of Murcia based estate agents, Mercers, said that confidence is returning. ‘There’s no question that Spain has had a tough post bubble ride. In many regions, including ours, prices have fallen by half and confidence took a tumble along with Spain’s economy,’ he explained.
‘But now the Spanish government expects an upgraded forecast of 1% economic growth for 2014 and the property revival is gathering momentum. Informed investors, in particular from overseas, are snapping up the bargains and traditional buyers are following in their wake, bringing life to this property market,’ he added.
Mercers saw total sales for 2013 outstripping 2012 by a substantial 60%. The dominant nationality was British making 64% of last year’s purchases. As buyer confidence continues to grow, the firm predicts 2014 sales will eclipse those of 2013 by a further 30%. However, it doesn’t expect any price rises, at least for the first three quarters of the year.
Data from the Housing Department in Spain shows that in the fourth quarter of 2013 foreign buyers spend 12% more on average than locally based buyers.
Foreigners spent an average of €153,300 on a property while Spaniards spent an average of €135,000. According to Mark Stucklin of Spanish Property Insight this could be because foreigners tend to buy in more expensive locations like the coast, and cities like Barcelona.
In both cases buyers spent less than 12 months previously with foreign buyers spending 2.5% less, and local buyers 6% less, as Spanish property prices continued to fall.
Foreigners bought a total of 14,800 homes in Spain in the quarter, down 1.3% compared to the same quarter in 2012. Foreigners spent an average of €261,000 per property in the Balearics, and €214,000 on the Costa del Sol, the data also shows.