Foreign demand for property in Spain is close to record highs as a percentage of the Spanish housing market, and continues to expand on the back of British demand.
13.52% of all Spanish home sales inscribed in the Property Register in the third quarter involved a foreign buyer (chart above), reveals the latest report from the registrars. That means that more than one in ten properties in Spain today is bought by a foreigner, including both residents and non-residents.
A total of 12,535 home sales involved a foreign buyer in Q3, up 20% on the same period last year, compared to a 16% rise in local demand (80,251).
Year to date (first three quarters), foreign demand was up 13% to 34,758 sales, compared to a 12% increase in the local market, to 235,749 sales. Year to date, foreign demand was 12.85% of the housing market.
After years of declines, local demand has finally started growing, but not as fast as foreign demand, which is once again increasing in market share.
After crashing in the first years of the crisis, foreign demand has come roaring back, providing the only bit of good news for the Spanish property market as it suffered an extended collapse in local demand.
“The active presence of foreign buyers in the Spanish housing market has provided a big contribution at a times of very low overall demand, and the fact that this demand is consolidating, and even growing, in a period of recovery like the present, offers great encouragement for the future,” explain the registrars.
BRITISH BUYERS LEAD THE CHARGE
A 20% increase in foreign demand is impressive, but the big story in the numbers is the increase in British demand.
The British bought 2,895 Spanish homes in Q3, more than double the next biggest group (France, 1,095), and a big increase (+31%) on the previous quarter.
By nationality, foreign demand for Spanish property in Q3 breaks down as follows:
British demand has steadily increased from 15% of foreign demand in Q1 2014, to 23% now.
Year to date, the British have bought 7,065 homes in Spain, up from 5,503 in the same period last year, an increase of 28%.
CHANGING FORTUNES
British demand increased by an annualised 53% in Q3, way ahead of Italy in second place with an increase 29%. Likely factors behind this big increase in British demand include a stronger Pound (now above 1.40€, last seen in 2007), an improving economy at home, and Spanish property prices that have tumbled as much as 70% since the boom.
At the other end of the scale Russian demand collapsed by 46%, no doubt thanks to a myriad of well known problems at home in Russia.
David says:
Surely the 46% collapse in Russian demand is worthy of a headline such as the British demand up 53% rather than a last sentence mention? It’s not too dissimilar in percentage terms.