Swedish buyers are one of the most important groups of foreign buyers in the Spanish property market, so it helps to keep an eye on them.
2,806 Spanish home sales inscribed in the Spanish Land Registry in 2019 involved a Swedish buyer, according to data from the latest market report from the Spanish Land Registrars’ Association (chart above).
Year on year, purchases by the Swedish were down 25.7% in 2019, the biggest fall of any of the main European markets. That fall represents a downward shift in gear for Swedish demand, which grew strongly between 2013 and 2017, before falling slightly in 2018.
However, if you look at the change in demand by quarter, the picture is more optimistic. It looks like the declines bottomed out in the first quarter of 2019, and got smaller with every subsequent quarter. If that trend were to continue without any external shock, you could expect Swedish demand to be flat or even growing again in 2020.
As a result of the big decline in 2019, Swedish buyers fell to sixth place behind Italy, with 4% market share.
Assuming that Swedish demand has not changed significantly in terms of regional preferences since 2015 (a fair assumption based on reliable data), the distribution of Swedish buyers by region and province would have been approximately as follows in 2020.
Insight from the market front line, where the Coronavirus is starting to bite
Swedish market expert Daniel Nilsson, CEO of Fastighetsbyrån Overseas, the international division of Sweden’s biggest estate agency, explains what’s been going on in the Swedish market for Spanish property.
The growth in Swedish demand during the last ten years has been through new segments entering the market. Whereas the typical Swedish buyer 10-15 years ago was a more or less wealthy 55+, ”less wealthy” new segments in the age range 35-45 years entered the market as property prices were relatively low and with cheap and ever more frequent air communications, the last permitting even young families to visit Spain frequently for shorter periods.
In the last couple of years, property prices in Spain have risen, which in my opinion would be the main driver behind the general Northern European decline, and on top of that the Swedish Krona has weakened, eroding the Swedish purchasing power, cutting the quite price-elastic demand. Also, as an additional ingredient there is an ongoing public debate in Sweden about the CO2 emissions from air transportation and their impact on climate change, which may also have played a part.
Which is why Fastighetsbyrån have just launched a climate compensation scheme for the flights of its homebuyers in Spain and Portugal. As a leading foreign agency in Spain, and with the ambition to be a driving force in the development of the sector, we want to use our influence for broader sustainable change. Get in touch with us for more information on climate compensation scheme for our homebuyers in Spain.
However, bear in mind that we’ve seen around 700 registered Swedish transactions per quarter since Q4 2018, and that the decline seems to have bottomed out. As a reference, back in the crisis years 2008-2009, there were 400-500 Swedish transactions per YEAR, so we’re still far from those figures.
Also, when looking at the figures from the Spanish Land Registrars, please also remember that there is a time lag in Registrars’ figures. In reality they are reporting what happened in the market six months ago, as the average resale property would take up to six months to register from vendor-buyer ”handshake”. For new-build even more, obviously.
For this year so far we’ve seen a dramatic positive change, revenues are up 20% and enquiries (leads) from Sweden by 35%, YTD compared to 2018. There is no good answer as to why, other than that our clients don’t seem to be all that concerned by the weak Krona anymore. They are not comparing today’s exchange rate to the levels of 8,5 or even the historic average at 9,6, and seem to accept the 10,5 level.
However, from mid-Feb and onwards we are experiencing some Coronavirus concern, and a hesitation to travel on part of our clients with cancelled viewings as an effect. Depending on how things develop, a worst case scenario in the short term could be compared to when Eyjafjallajökull erupted in March-April 2010, and the European air space was shut down for a period, leaving us with no viewings during that time.