Small increase in expat residents buying homes in Spain

12pc more foreign residents bought homes in Q2 than the same time last year, but numbers are still heavily down compared to the boom year of 2006.

It appears an in increasing number of expats living in Spain are taking advantage of low property prices, judging by the latest figures from the Housing Department, in the Ministry of Public Works (Fomento). The number of house sales to foreign residents increased by an annualised 12pc to 9,502 in Q2, lead by a 25pc increase in Catalonia. The Valencian Region, with its Costa Blanca, was once again the biggest market by some margin.

However, the trend is only positive compared to the years since the crisis began. If you look back to 2006, expat purchases are down 68pc on average, and as much as 72pc in Catalonia. But at least expats are doing more than Spaniards themselves to buy Spanish property: Purchases by Spaniards are still declining.

Nevertheless, it’s is good news to see that more expat residents are buying property, and it is a relief to be able to report it.

Note that expat residents include economic migrants, and these numbers don’t distinguish between them and what I call climate migrants from northern Europe. But it’s a fairly safe bet that the vast majority of expat residents buying in the popular holiday-destinations of the Spanish coast (Andalusia, Valencian Region, Catalonia, Balearics and Canaries) are in the latter group.

The following table breaks down expat purchases by region (click to enlarge).

Comments

comments

4 thoughts on “Small increase in expat residents buying homes in Spain”

  1. Sam F

    The majority of properties being sold are in fact new ones, especially owned by banks and in particular the likes of golf complexes. These properties are cheap, you dont have to worry too much about mortgages either, which is the real hurdle of buying in Spain

  2. Mike

    The vast bulk of properties on golf complexes were over-priced to the Power N. Buying them cheaply now (aka paying their actual TRUE worth) counts for very little. 2 separate issues are at stake here: for one, the golf complexes themselves are struggling (most of them in their death throes actually) and secondly, no-one ever seems to take into account either that, OR the COLOSSAL urbanisation fees that owners face when buying properties there.
    The various Developers (invariably Spanish)originally loaded the owner’s fees to cover everything that they didn’t wish to pay for themselves (just about everything) – “if the fortiegners are so keen to avail themselves of our sun, then let them pay through the nose”. There are urbanisations (I know from personal experience) where owners face paying in excess of €2,500 pa for even nominal, but vastly-overpriced Services.
    The “administration” companies (again, invariably Spansh) enforced stratospheric charges for their so-called Services – initially secure in the knowledge that the forriegners would pay without protest. So they did for years, but now, realisation of some of these Companies are coining in some €150,000 pa for little more than paying bills (by D/Debit) and collecting fees (also by D/Debit), and the worms are turning.
    Like the Housing market in general, these greedy, parasitic, scheming “administration” companies are now being slowly dumped by their once-despendent plebs – despite their desperate attempts to continue raking it in from now, so-so-dumb foreigners.
    It’s going to take some time, but “eventually” the parasites on the backs of foreigners are going to bite the dust.
    Unfortunately, however short the period, untol misery is going to be inflicted on tens of, if not hundreds of, thousands of foreign buyers.
    NO amount of optimistic press announcements (in the Spanish media) will compensate for the word-of-mouth experiences that leak back to potential buyers.
    The bubble has burst, and the golden egg is addled, we may just as well accept this.

  3. Carl Dans

    I enterily agree with Mike (reply 8th October)

    Although the economic crisis was unavoidable in most countries in Spain it was self inflicted somehow. As Mike points out the thinking is “if you like our sun pay for it”, but it became a scandalous rip off.

    The culture in Spain is to stay put once one buys a property and is only the foreigners who boost the housing market by frequently buying and selling to go upmarket or moving somewhere else.

    As an article above points out there are more than 8 million empty homes in Spain. Were it not for the foreigners those homes wouldn`t have been built for the domestic market as there is no demand, so the foreign demand helped the Spanish economy enormously. Now one would expect that if somebody found a goose that laid golden eggs he would look after it very careful, but not in Spain.

    Many Spaniards have the short term gain in mind and if an opportunity arises they take advantage of it. It is puzzling how many mayors in little towns and villages in Andalucia have been prosecuted lately for corruption, some having stashed away millions of euros, in some villages the population have demonstrated in favour of the corrupt mayor because that corruption provided income to many of its citizens. It is only now the government realizes they have to clamp down, or may be they knew it all along but the short term gain was in their mind.

    When a country considers as normal thing to do during the purchase of a property, even in front of a notario who is the person with the legal power, to underdeclare the value of the property to the Taxman to avoid paying more capital gain taxes by the seller and the buyer pays the value declared by cheque but the rest in cash and when this new buyer sells the property he is liable to pay not only his own capital gain taxes but also the sellers he bought from or when a foreigner buys a property sticking to the letter of the law and is threatened with demolition is it a wonder Spain is in such a state?.

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About Mark Stücklin

Mark Stücklin is a Barcelona-based property market analyst and consultant, and author of the 'Spanish Property Doctor' column in the Sunday Times (2005 - 2008). He can be reached by email on ms@spanishpropertyinsight.com.