Factors driving the strong growth in US demand for property in Spain

Though still relatively small compared to big markets for property in Spain like the UK, Germany, and France, demand from the US is increasing the fastest according to the latest figures, so what factors are driving the growth in American demand?

1,340 Spanish home sales involved a buyer from the US in the first half of the year, up 14pc on last year, according to the latest figures from the Spanish notaries’ association, as illustrated in the chart above.

If you look at markets for property in Spain from where the majority of second-home buyers come from, the US was the only market along with Russia to grow in the first half, as illustrated by the next chart. Russian demand is being driven by factors relating to Putin’s invasion of Ukraine.

That said, the US is still a small market with just 3.2pc of market share in the ‘rich world’ segment, as shown in the pie chart below.

The big increase in US demand came from non-residents buying second-homes (perhaps to use as a permanent home in future), up 23pc compared to a modest 4pc increase in the number of American expats in Spain buying property.

Factors driving the increase in US demand for real estate in Spain

According to industry insiders consulted by the property portal Idealista, the factors driving the growth in US demand are typical considerations like the Spanish climate, legal security, low political risk, attractive property tax rates, and the good quality of life. Good flight connections direct to the US from popular destinations like Barcelona, Mallorca and Malaga also help.

Various schemes to attract foreign talent and investors like the Spanish ‘Golden Visa’, the ‘Digital Nomad’ visa, and the ‘Beckham Law’ also help attract foreign expats and investors, including from the USA.

A strong US Dollar has also helped boost US demand in the last year and a half, with the Dollar breaking parity with the Euro for a brief period last year, though it has fallen back somewhat in 2023.

A good choice of properties to buy in a rich variety of settings like historic cities, the Mediterranean coast, and the Balearic islands are other factors cited by industry insiders. Approximately 40pc of American buyers head for Andalusia, 23pc for Catalonia (mainly Barcelona), 14pc for the Valencian region, 10pc for Madrid, and 5pc for the Balearics.

Spanish property is seen as good value compared to other European destinations, so the investment potential of Spanish property is another factor driving US demand growth.

Finally, some agents mention that their American clients are looking to escape from the polarised political and social environment in the States, and bring up their kids in a healthier environment.

Whatever the individual motivations of buyers from the US, the latest figures show that American demand for Spanish property continued to grow strongly in the first half of the year.

Explore the US market and other foreign markets in the Data Hub.