Foreign demand is picking up, and the British are still the biggest group of buyers in Spain, followed by the French and Russians.
What with the 25pc fall in the pound, and all the property scandals that have snared British investors, you could forgive the British for spurning Spain like the Germans did at the start of the last decade. But despite everything, the British are still the biggest group of foreign investors in Spanish property, with 15pc of the market (see chart above).
Based on the latest stats from the Property Registry, the British purchased 1,378 homes in Spain in the third quarter of the year, and 3,965 in the first nine months of the year. They are on course to exceed the 4,469 homes they bought last year, clocking up two years in a row of rising investment. But despite this obvious improvement in British sentiment towards Spanish property, British demand is still a long way from what it was in boom years like 2006, when the British made up 42pc of foreign demand, and bought 22,617 homes in Spain that year.
Next came the French with 1,070 purchases in Q3, and 2,678 year to date (YTD), followed by the Russians with 874 in Q3 (2,412 YTD). Overall, foreign demand was 9,342 in Q3 (26,751 YTD), on course to beat 2012’s year-end total of 26,871.
A more diversified group of nationalities is being attracted to Spain by peak-to-present property prices falls of 50pc or more, and now by the so-called “Golden Visas” (Spanish residency investor visas) that target wealthy non-EU nationals.
The following chart shows foreign demand by nationality in Q3, ranked from highest to lowest.
Overall demand still in the dumps
Overall demand is still deeply depressed, in Q3 just 76,818 (256,586 YTD), of which 67,476 (229,662 YTD) was made up of local demand, which rose an annualised 2pc in Q3, but fell 3pc on a monthly basis. Overall sales this year might even come in below 300,000, which would be a crisis-era low.
Heavily depressed local demand plus rising interest from foreign investors explains why foreign demand now accounts for 12pc of the market, higher even than the 9pc peak it reached during the boom.