Foreign demand for property in Spain hit an all-time high in 2022 reveal the latest figures from the Spanish Land Registrars’ Association.
Foreign demand in 2022
94,481 Spanish home sales involved a foreign buyer in 2022, an increase of 55% on 2021, show the latest figures. Local demand was up 9% to 551,760, meaning total demand of 646,241 in 2021, up 14%
Foreign market share in 2022
As a result of foreign demand growing stronger than local demand, the market share of foreign buyers increased to a record annual high of 14.6%.
Sources of foreign demand in 2022
Looking just at rich countries (predominantly the EU and USA) from which buyers come to Spain for second-homes, relocation-homes, and Golden Visa investments , the UK was once again the biggest market with 9,837 purchases, 19.2% of this market, up 47% year-on-year, followed by Germany with 8,416 purchases, 16.4% of the market, up 44%.
The biggest increase came from Poland (+161%) no doubt encouraged by Putin’s invasion of neighbouring Ukraine, followed by the Netherlands (+88%), Norway (+71%) and Ireland (+65%). Russian demand was up 30% to 1,709 purchases, and Ukrainian demand up 110% to 1,554.
Where did foreigners buy property in Spain in 2022? To answer this question we have to look at the 2022 Q4 figures as the regional breakdown is not yet available for the full year.
The Valencian Community, home to the Costa Blanca and Costa del Azahar was the most popular destination with 31.4% of market share (6,922 sales), followed by Andalusia, home to the Costa del Sol, with 21% (4,626) sales, and Catalonia with 17% (3,745 sales). Those three regions account for almost 70% of foreign demand for property in Spain.
Looking at the growth in foreign demand per region, the small market of Galicia was number one with an increase of 132% in Q4 2022, but the biggest growth in a large market went to the Valencian region, up 34%, followed by Catalonia up 33%, whilst Andalusia was up a modest 13% in comparison. The biggest fall was in the Balearics (-19%), which was probably caused by a shortage of properties for sale, high prices, the highest property sales taxes in Spain, and moves by the Balearic regional government to make foreign investors feel unwelcome.
Why the big increase in foreign demand in 2022?
No doubt some element of pent-up demand from the pandemic turned into sales in 2022, but the scale of the increase suggests there is more to the story. Other factors lie behind the dramatic increase in foreign demand for property in Spain last year, including low interest rates, and the perceived attractiveness to international buyers of Spanish property as an investment in turbulent times.
NOTE: These figures are based on the sum of the four quarterly reports for last year published by the Registrars, who have not yet published their annual report for 2022. The annual figures will be slightly different, but the overall picture will not change significantly. I should also point out that, when it comes to foreign demand, the figures published by the notaries’ association are always much higher and, in some ways, more useful, but those figures won’t be available for several months.