Foreign Spanish property sales up 17pc
Foreign buyers are “vital” to the Spanish property market, according to experts. Spain’s housing market, still struggling to recover from financial crisis, is relying upon overseas buyers to step up their activity. And buyers are doing just that, with international investment growing by 17 per cent last year.
The statistics, from the Bank of Spain, show that foreign nationals spent more than ?5.4 million on Spanish property in 2012, the highest volume of international investment in eight years.
They follow figures from the Department of Housing, which show that foreign investors now make up 12 per cent of the Spanish real estate market - a significant portion that makes them “vital” to any recovery, notes Spanish Property Insight.
Indeed, 12 per cent of the market is already back at pre-crisis levels, with foreign buyers growing quickly. Foreign buyers fall into two categories: non-residents and expats. Non-resident sales increased the most, surging by 42 per cent - dwarfing the 2 per cent increase in domestic purchases.
But non-residents still only account for 1 per cent of the market. Expat sales, on the other hand, grew 25 per cent to account for 11 per cent of the total. A significant chunk of the expat buyers are Northern European migrants, who are increasingly snapping up Spanish houses as low-priced holiday homes in a nicer climate.
Indeed, according to Taylor Wimpey Espana, Russian and Scandinavian buyers now account for 45 per cent of their sale in the Costa del Sol in 2013
Marc Pritchard, Sales and Marketing Manager for the house builder, comments: “For us, Russians take the top spot of biggest property purchasers followed closely by Scandinavian buyers. Marbella in particular is one of the most popular places for foreign nationals to buy property in Spain. Here at Taylor Wimpey España we have experienced a 300% year-on-year increase in sales in the area, proving that demand for Spanish real estate shows little sign of abating anytime soon, with non-residents of the country increasing their market share for six consecutive quarters now.”
Further up the coast, in the Murcia region, estate agent Mercers has seen a similar leap in activity.
At the start of the year, the agent predicted a 25 per cent increase in sales for 2013 compared to last year. Their figures for the first quarter show exactly that.
Chris Mercer, Director of Mercers, says: “I can’t pinpoint exactly why our sales are up so much, but momentum is certainly beginning to build. It can’t be attributed to an end-of-year rush before VAT on new builds went up from 4% to 10% on 1 January, as all of our transactions have been resales. Furthermore, enquiries have not increased at the same level but those we have are more serious, have the funds in place and are intelligent enough to know that the window of opportunity on a serious Spanish property bargain will not be open forever. Lastly, compare Q1 2013 with Q1 2011, and Mercers’ business is up almost 65%, quite some margin. Needless to say we’re revelling in the positivity.”
Indeed, the Mercers growth has been echoed by the wider market in Murcia, with sales (according to the National Institute of Statistics) up by 24.1 per cent in February 2013 year-on-year.
Foreigners are certainly partly responsible for keeping the Spanish property market alive, admits Chris.
“Prices are now very low and, in our area, we are looking at reductions of 40% to 55% from the peak. This is turning the heads of international buyers... This is good news as demand remains weak on the domestic front as Spain tackles high unemployment and an ongoing reluctance to lend by financial institutions. For Mercers, Belgian, French, Norwegian, Swedish and more recently British buyers have dominated over the past year – with some renewed interest from Germans and Dutch.”
He adds: “Without them, Spain’s property market would be in a far sadder state.”