When you buy and sell property in Spain it helps to know who else is in the market with you, as liquidity determines how easy it is to find a counterparty. Foreign investors are an important segment of the market, so where are they to be found?
2021 was a record year for foreign demand as explained in last week’s article the Pandemic gives fresh impetus to foreign demand in 2021, and foreign buyers were 16.5% of the market last year. But just 9 of Spain’s 50 provinces attract 90% of foreign demand, so if you buy in a province like Teruel, which is the least popular province with foreign buyers with just 0.01% of the market, it’s a safe assumption you probably won’t find a foreign buyer when the time comes to sell, beautiful though Teruel is.
According to the latest figures from the Spanish notaries association, the Valencian Community was the most popular of Spain’s autonomous regions with foreign buyers accounting for 26% of the market (29,019 buyers), followed by Andalusia on 20% (22,625 buyers), and Catalonia on 16% (17,493 buyers). The pie chart below gives the full breakdown of foreign demand market share by region.
The notaries also provide maps that show how foreign demand is distributed across Spain. The map on the left shows purchases by foreign non-residents (buying holiday-homes) in H2 2021, and the map on the right shows purchases by foreign residents in Spain, including economic migrants and lifestyle expats. In each case they show the foreign market share of the top two nationalities in each region (or first / second equal in some cases).
Looking at the map on the left (non-residents buying second homes) the British were number one in three regions and number one or two in seven. The Germans were number one in four and top two in thirteen, and the French were number one in seven. Interestingly, Americans – a long way from home – were number one in two regions and number one or two in four. So even though the Germans were the second biggest group of foreign buyers in 2021 behind the British, they were number one when it comes to buying holiday-homes off the beaten track in regions like Castile & Leon, Extremadura, and La Rioja.
Looking at the map on the right (foreigners resident in Spain, including economic migrants from Morocco and Romania, and lifestyle expats from the UK and Germany), Moroccans and Romanians were number one or two in 11 regions each, whilst the British were number one in the Valencian region, and number two in Andalusia, the Balearics, Murcia and Galicia, whilst the Germans were number one in the Balearics, and number two in the Canaries (where the Italians were number one). So when it comes to lifestyle expats, the British were the most adventurous.
Foreign property searches from outside Spain
More detail on foreign interest by location is provided by the Spanish property portal Idealista, which has just published a table of small municipalities that attracted the most searches from abroad in Q4 last year. They analysed searches from abroad focused on municipalities with populations of 5,000 or less, to get an idea of foreign interest in localities away from the big tourist hotspots like Marbella and Benidorm.
According to their data, the most popular ‘small’ town was Ciudad Quesada in Alicante province on the South Costa Blanca, led by Dutch interest, with Germany in second place, and the UK in third place. In this study Alicante province had six of the top twenty five most sought-after small towns, and the Balearics had nine, all led by German buyers looking for some of the most expensive property (prices in dark blue). You can click on the table headings to arrange the results by any of the columns. Germany and Holland dominate the top searches, whilst the UK was runner-up in almost half the locations.
What does all this show? It simply gives you a sense of where foreigner go to buy property for sale in Spain, and where they come from. It might not be your main consideration, far from it, but it can be helpful to know.