Foreign demand for property in Spain rose by 15.6% in the first quarter of the year, whilst British, though falling 23.6%, but has not collapsed, reveal the latest figures from the Spanish Land Registrars’ Association.
The number of homes sales involving a foreigners buyer inscribed in the Land Register in Q1 was around 14,870 (chart above), up by 15.6% on the same period last year (chart below).
Foreign demand was 13.1% of the housing market in Q1, a fraction above its share last year.
Overall, the Spanish property market expanded by 14.4% in Q1, with local demand up 14.2%. The overall market (and local demand) have now expanded every quarter for the last four years.
Despite Brexit the British were still the biggest group of buyers by a wide margin, with 2,150 home purchases and 15% foreign market share, followed by the French (1,433 purchases, 10% market share) and Germans (1,137 purchases, 8% market share).
British and Irish buyer numbers decline
By nationality, foreign demand rose across the board, with the exception of the UK (-23.6%), Ireland (-5.8%), and Ukraine (-0.5%). Italian buyers led the way with an increase of +57.8%.
One trend to note is the steady increase in buyers from the ‘rest of the world’, a number that has been increasing since the start of 2014. All countries that account for less than 100 buyers a year are lumped into this group, and they now represent 41% of the foreign market. So demand for property in Spain is increasingly diversified and fragmented, with important implications for agents and developers. It’s easy to target British, but how do you target this increasingly important and diversified group called the ‘rest of the world’?
Brexit impact on the Spanish property market
Talking of British demand, Brexit has clearly had a negative impact, I would argue mainly due to the weakness of the Pound. But I am surprised how well British demand is holding up in the face of Brexit. It actually rose 4% compared to the previous quarter (Q4 2016) and is still 10% higher than it was in Q1 2015. So it seems British buyers are being pretty sanguine about Brexit, and they are still 50% larger as a group than the next biggest market – the French. The British love-affair with Spanish property is not over, but maybe it’s just the hardcore who are still buying.
You can read the full quarterly housing market report from the Registrar’s Association in Spanish here.