Foreign demand for property in Spain has been flat or negative for the last five quarters, but at least the decline appears to be getting smaller, though it does depend which way you look at it.

Foreign buyers were involved in 14,908 Spanish home sales in the last quarter of 2019, according to the latest market report from Spain’s Association of Land Registrars, based on a sample of recorded sales (so the exact number of foreign buyers might be slightly different).

Foreign demand was down 2% in a year, compared to local demand down -2.4%, so overall the market contracted by an annualised 2.3% in Q4.

You can see from the next chart how foreign demand started falling earlier than local demand, but also bottomed out a bit sooner, with both segments ending up Q4 in almost exactly the same place.

As a result of the latest change in local and foreign demand, the latter had a market share of 127% in Q4, similar to where it has been in the last four or five years.

Spanish Property: Foreign demand by nationality in Q4 2019

British buyers are still clinging onto the number one spot with 2,125 registered purchases in the period, 14% of the foreign market, ahead of the French with 1,287 purchases and 8% of the market. Almost half the market (49%) with 7,450 acquisitions came from countries which the registrars lump together as the rest of the world as buyer numbers are too small to list them individually.

When you look at how demand changed by nationality in Q4 2019 compared to the same quarter last year you see growth from countries like Morocco, Romania, Bulgaria, and Algeria, where the buyers are mainly economic migrants in Spain. Demand from traditional second-home and lifestyle expat markets in Europe like the UK was mainly negative, with the exception of France (+5%).

Italian demand is mainly Argentines with dual-nationality buying in cities like Barcelona

So even though foreign demand was only down 2% in the last quarter, the smallest decline all year, the improvement came mainly from economic migrants buying segments of little interest to foreign investors from wealthy countries who can afford a retirement or second-home in Spain.

That said, the changing demand curve for the five biggest markets including Italy suggest that that falling demand has bottomed out in the UK, and even started to improve in the other countries, as you can see from the final graph below. It will be interesting to see what 2020 brings.