Demand from foreign buyers grew by 27.2 per cent in the first quarter compared to a year earlier, with foreigners representing 19.4 per cent of the total sales market, according to the latest data released by the Spanish General Council of Notaries.
Of the foreigner buyers, the lion’s share were non-residents, who accounted for 47.2 per cent of the market, providing a clear driver for any rebound in sales.
Not surprisingly, the biggest increases in foreign demand were found in coastal areas, including a 43.3 per cent jump in Basque country, 41.1 per cent in Catalonia and a 36.4 per cent increase in the Balearics. There was also a big increase in Madrid, where foreign demand 42.5 per cent, which fits with the recent growth in international investor in Spain’s undervalued big cities.
The surprise might be the growth in Basque country and Asturias, where foreign demand was up 34.8 per cent. Neither is typically at top of the list with foreigner buyers, but the dramatic increases may simply reflect the very low base of earlier activity.
While the influence of foreign buyers is growing, they are increasingly frugal. The money they spent on property in Spain continued falling in the first quarter, down 3.8 per cent over 12 months to €1,486 per square metre.
By nationality the British were once again the biggest group of international buyers in the first quarter with 13.8 per cent of the market, followed by the French with 10.5 per cent, Russians at 8.4 per cent, Germans 7.5 per cent and Belgians at 6.9 per cent.
The country that showed the largest increase in purchasing was the United States, up 88.9 per cent, a statistic that is almost certainly skewed by the large investor funds active in the market. Demand from China was up 83 per cent; with Ireland up 78 per cent; France, 69.8 per cent; and Russia up 62.6 per cent, the notary group reported.
Resident foreigner demand rose by 38.9 per cent, compared to 18.5 per cent for non residents. But that increase can be largely explained by the end of mortgage tax relief at the end of 2012, which distorted all resident demand.
In the foreign resident market, the number of Russian buyers increased the most, rising 77.7 per cent, followed by Chinese at 66.5 per cent. Demand by British foreign residents actually fell by 3.6 per cent.
Looking at non-resident buyers, the volume of Chinese buyers increased 666 per cent in the year, but there were still only 69 buyers, despite hopes the Golden Visa would attract more Chinese buyers. The number of non-resident Romanian buyers increased 187.5 per cent for the quarter.