Who knows how far the Spanish property market would have sunk without foreign buyers in 2012?

Foreigners (non-Spanish nationals) bought 26,871 residential properties in Spain in 2012, up 12.7pc on 2011, according to the annual report by the College of Property Registrars (Registradores.org).

Making up 8.12pc of all home purchases last year, foreign buyers have been increasing as a percentage of total buyers since bottoming out at 4.2pc in 2009, as illustrated by the graph above (foreigners as a percentage of buyers).

Foreign buyers are now almost as important to the Spanish property market as they were in 2006, when the real estate boom was in full swing, and waves of economic and “climate” migrants were investing in the Spanish property dream.

In coastal areas, where “climate” migrants from northern Europe tend to buy holiday-homes and retirement homes, the impact of foreigners was much larger. Foreign buyers as percentage of sales in popular regions were as follows:

• Alicante (Costa Blanca): 33pc
• Balearics: 25pc
• Barcelona: 6pc
• Girona (Costa Brava): 25pc
• Las Palmas (Canaries): 17pc
• Murcia: 11pc
• Tenerife (Canaries): 27pc

Whilst foreign buyers increased by 12.7pc in 2012, local buyers (Spanish nationals) decreased by 18.4pc to 303,879.

With the woeful way things are going with the Spanish economy, I expect that foreigners will make up more than 10pc of demand this year, the best efforts of the Spanish Government to discourage them notwithstanding.

Without foreign demand providing support at the margin, the Spanish property market would have gone much further down the drain in recent years. I think it’s fair to say that foreign buyers kept the wheels from spinning off the Spanish property jalopy in 2012.

British buyers still dominant

Despite all the talk of Russians and Chinese buyers coming to the rescue, British buyers are still the stalwart of foreign demand for homes in Spain. They bought 4,469 homes in Spain last year, 22.5pc of the European total, 16.6pc of the foreign total, and 1.35pc of the total market, and increased by 4.1pc on the previous year.

As a group, the British are still 70pc larger than the French in second place, and double the size of the Germans (now in fourth place, behind the Russians). But the Brits are nothing like as important as they used to be at the peak of the bubble, when they came to represent more than 50pc of European demand. You can see how European demand broke down in 2006.

Foreign demand is much more diversified now, which I would argue is a good thing. But, note that the sum total of foreign demand today (26,871 buyers) is not much larger than British demand alone in 2006 (22,617). They market may be more diversified, but the slump in British buyers over the last 5 years has left it much reduced.

Regardless of where they come from, it’s clear that foreign buyers are increasingly important to the Spanish housing market and economy. So why, you may ask, does the Spanish Government appear so keen to discourage them?

Spain’s recent law on worldwide asset reporting hammers expats, and plans on the table to restrict holiday rentals in Spain are bad news for holiday-home buyers of all nationalities. The Spanish Government should be rolling out the red carpet for foreigner buyers and their money, not menacing them with daft new regulations.

Spanish buyers beat a retreat from the housing market

Finally, a table comparing local demand to European-demand-plus-China over the last 3 years. Spanish buyers dropped by 18pc, whilst (most) other Europeans bought in increasing numbers, driving European demand up 12.3pc, and foreign demand up 12.7pc.

Lower house prices in Spain were a common attraction for all nationalities, but beyond that each group had it’s own reasons for buying. But that’s a story for another day.