Official figures recognise that foreign demand is increasingly important to the Spanish property market, but they are totally misleading about the residency status of foreign buyers.
The Government recently published data on home sales in the third quarter illustrating the importance of foreign demand to the Spanish property market. There is no doubt that foreigners are an important and growing segment of the market, but the figures are clearly wrong when it comes to the residency status of foreign buyers.
According to the Ministry of Public Works (Fomento), which administers housing policy at a national level, foreigners bought a total of 16,743 homes in Spain in Q3, representing 18% of the total housing market. According to their figures, foreign resident demand rose 22% year-on-year, and non-resident demand by 12%. By region, Alicante was the most popular province with foreign buyers, followed by Malaga, Barcelona, the Balearics, and Madrid.
Fomento breakdowns foreign demand by residency status (living in our outside Spain), and this is where the problem arises. They claim that 93% of foreign buyers in Q3 were resident in Spain (15,589 sales), whilst just 7% of sales (1,154) involved a foreign buyer living outside Spain.
However, my own experience based on years of talking to foreign buyers and vendors, and professionals in the business, tells me the Government has got the figures wrong. When it comes to foreign demand, non-residents buying second homes in Spain are a much bigger group than foreign residents.
I think every estate agent catering to foreign demand would agree with me. “Every single foreign client of ours this year was a non-resident,” Alfred Milá, head of Sonneil.com – an estate agency with sales operations on the Costa del Sol and Costa Blanca – told me this morning. “It’s a similar story at other companies I know selling property on the costas.”
What lies behind this mistake? I’ll try and find out in the new year, but in the meantime, don’t believe it if you hear that most foreign buyers in Spain also live here.