Home » FOREIGN DEMAND 2022: Country analysis shows US demand rising fastest, whilst Brits buy the most but spend the least (part II)

FOREIGN DEMAND 2022: Country analysis shows US demand rising fastest, whilst Brits buy the most but spend the least (part II)

foreign demand for spanish property 2022

Part II of a series analysing foreign demand for property in Spain in 2022, this article looks at sales and spending by nationality, revealing that buyers from the USA shot up last year, whilst British buyers bought the most but spent the least.

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To recap from part I that looked at the overall trend in foreign demand for Spanish property in 2022, it was a record year for the foreign market with sales up 29% to 143,629 in 2022, as illustrated by the chart above. That is the background to this analysis of demand by nationality.

Spanish property sales by foreign nationality 2022

The data analysed in this article comes from the association of Spanish notaries, which breaks down demand by nationality for the largest markets (by volume), and lumps buyers from all other countries into one group called ‘the rest’. The chart below shows that the rest were the biggest group in 2022, with 16,914 sales, up 25% in a year. ‘The rest’ has been steadily growing and gaining market share for at least the last five years, which suggests that foreign demand for Spanish property is more internationally diversified than ever. I will analyse each market in detail including ‘the rest’ in separate reports for Data Hub subscribers.

Of the markets given individual treatment by the notaries, the smallest was Ecuador, with 1,250 sales last year. Buyers from Ecuador are almost all economic migrants, like buyers from Morocco and Romania, who purchase in a different segment to buyers from rich countries like the UK, Germany, and the US, whom we might call lifestyle buyers featured in the next two charts.

The biggest ‘lifestyle’ markets for Spanish property are European countries like the UK, Germany and France, buying relocation or second-homes on the Spanish coasts and islands, but also, to some extent, in Spanish cities like Barcelona, Madrid, and Palma de Mallorca.

In 2022, for the first time, buyers from the US made it into the top ten ‘lifestyle’ markets, ahead of Denmark, Switzerland and Norway, but still a long way behind the big three markets of the UK, Germany and France. The UK was number one with 15,355 purchases, ahead of Germany (14,089) and France (10,819). The staying-power of British buyers despite Brexit and a soft Sterling is quite impressive.

Change in demand for Spanish property by nationality

Turning to the annualised change in demand of the key ‘lifestyle’ markets the US increased the most (+53%) followed by the Netherlands (+49%) and Norway (+43%). All markets increased significantly bar Sweden, which remained unchanged compared to 2021.

However, looking at growth broken down between the first and second half of the year, another pattern emerges. Almost all the growth came in the first half of the year, and demand in most markets cooled significantly, or even declined, in H2 (next chart). Only the USA and Italy had any meaningful growth in the second half (note that a significant number of ‘Italian’ buyers are really Argentinians living in Spain under Italian passports).

Foreign demand by type of buyer

The data distinguishes between two types of buyers: 1) Foreigners living in Spain (expats) buying first and second-homes and 2) foreign non-residents (FNRs) buying second-homes / holiday-homes, though as a reader recently pointed out, many of this group are buying with plans to relocate to Spain in future.

As illustrated in the next two charts, FNRs are the biggest group by some margin in all key lifestyle markets with the exceptions of Italy and the USA, and most of the growth last year came from FNRs with the exception of Norway and Belgium. High FNR growth from the USA and Italy can be a bit misleading – many of them may have plans to relocate to Spain once they have bought.

Spending by nationality

There is a significant difference in the amount of money different nationalities spend when buying homes in Spain, especially when you compare rich and poor countries, but even when you compare rich countries where most of the lifestyle and second-home buyers come from (final chart).

Buyers from Denmark and the USA spent the most last year (in terms of €/sqm), with the Danes spending 2,876 €/sqm on average, whilst the British spent the least (2,050 €/sqm). So the British bought the most but spent the least, and the Danes bought the least but spent the most.

Having covered overall demand in part I, and demand by nationality in this article (part II), foreign demand by Spanish region will come in part II, to be published in the next few weeks.

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