British market softens as foreign demand rises 20% in first half of year

Total foreign demand was up a healthy 20% in the first half of the year, according to the Notaries’ Association, but British demand clearly softened in the run up to Brexit.

Total foreign demand for property in Spain from both resident and non-resident foreign buyers increased 19.7% to 43,519 in the first six months of the year, up from 36,370 in the same period last year. These figures are based on sales witnessed by Spanish notaries.

That means that foreign buyers are now 20.3% of the Spanish housing market, up from 6.3% in 2008 and matching the record high hit in in the second half of last year.

Non-residents buying second homes were 50.5% of the foreign market, and expats resident in Spain were 49.5% of the market.

Non-residents spent an average of 1,855€/m2 compared to a total market average of 1,350€/m2. The people who spend the most are Spanish expats (Spaniards living outside of Spain), who spent 1,936€/m2.

The autonomous region with the biggest number of foreign buyers was the Valencian Community (home to the Costa Blanca and Costa del Azahar) with 11,853 (+16.6%), followed by Andalusia 8,527 (+14.3%), Catalonia 6,583 (+20.8%), the Canaries 5,006 (+20.6%), Madrid 3,493 (+19.1%), and the Balearics 3,207 (+28%).

The following maps illustrate the share of foreign demand by nationality in different regions, with the map on the left showing non-resident demand, and the map on the right resident demand, in both cases for the first half of the year. When it comes to non-resident demand for second homes the British were number one or two in almost all regions. Resident demand was dominated by economic migrants, in most cases from Romania and Morocco, though the British were also key players as expat buyers in Andalusia, Murcia, the Valencian Region, the Balearics, the Canaries, and Asturias. This all goes to show how much Spain has to lose if Brexit crushes British demand.

Share of foreign demand for spanish property by nationality. Left map = non-residents, right map = expats. Source: Notaires
Share of foreign demand by nationality. Left map = non-residents, right map = expats. Source: Notaires


The British were still the biggest group of buyers by far with 8,282 purchases (+15.7%), followed by France 3,479 (+8.9%), Germany 3,413 (+23.1%), Italy 2,815 (+34.4%), Sweden 2,579 (+41.2%), and Belgium 3,420 (+9.2%). The only nationalities to decline were Russia (-13.1%), Norway and Switzerland (both down 4.8%).

Though still the biggest national group of buyers by a wide margin, it is interesting to see that British demand growth softened considerably in the first half of the year, down to +15.7% from +41% in the same period last year. This almost certainly reflects the Brexit effect that has led to a weaker pound.


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