The latest figures from the Spanish Land Registrar’s Association for the last quarter of 2017 show foreign demand for Spanish homes growing unabated as British buyers return in force to the market.
I’ll look at the quarterly figures on their own in this article, and follow up with a piece on the annual figures in a subsequent article. Click on any image to enlarge it.
First of all, the overall market expanded by 19.8% in Q4 to 111,921 home sales – the highest fourth quarter level since the recovery began.
Foreign demand rose to 15,266 purchases, the highest level in a fourth quarter since the boom years.
The increase in demand for homes in Spain was driven by 19.7% increase in Spanish demand, and a 20.4% increase in foreign demand (next chart) compared to the same period last year.
As a result foreign demand was 13.6% of the Spanish housing market at the end of last year, close to all time highs.
Foreign buyers were led by the British with 2,384 registered purchases in the period, followed by the French (1,242), and Germans (1,198).
By market share, the British made up 16% of foreign demand, the French 8%, and the Germans 8%. Outside of key markets, the ‘rest of the world’ was 42% of demand.
Demand grew strongly in all markets with the exception of Germany (+3.4%) and Switzerland (-16.1%). The decline in Swiss demand might be explained by the close to 10% decline of the Swiss Franc to the Euro in the second half of last year. British, Belgian, and Swedish demand all rose strongly and increased market share in the last quarter, though the biggest increase in absolute terms came from the ‘rest’.
British buyers back in action
Though down from 24.2% market share in Q4 2015, British demand rose from 14.7% of the foreign market in Q3 2017 to 15.6% in Q4, suggesting that Brexit has had a limited impact on this key market. British demand is growing again in volume terms, though by value I suspect British investment is stagnant or even declining, as more buyers have been forced by a weaker pound to reduce their budgets.
This final chart comparing demand from the three biggest markets of the UK, France, and Germany illustrates how large and dynamic the British market is for Spanish property. The UK dwarfs the other two, and changes much faster.
The registrars also revealed that Spanish house prices rose 7.6% last year, according to their index and repeat-sale methodology. So the last quarter of 2014 was a buoyant period for the Spanish property market, and there are no obvious threats to this recovery on the horizon, with the exception of the constitutional crisis in Catalonia, whose effects so far appear to be limited to that region.