Rising Property Prices in Spain: A Closer Look at Foreign Buyers
Recent data reveals a striking trend in the Spanish real estate market: U.S. nationals, along with Swedes and Germans, are paying significantly more for homes than most foreign buyers. In the second half of 2024, U.S. nationals paid an average of €3,390 per square meter, surpassing the €3,000/m² threshold that only a few nationalities have crossed.
The Average Cost of Homes in Spain
According to the Spanish Notary Association, the average price for properties purchased by foreigners in Spain during this period was €2,362/m². While this figure reflects a broader market trend, it’s essential to note that affluent foreign buyers are driving prices higher, particularly in popular areas. The overall average across Spain was €1,753/m², indicating a significant disparity between local and foreign buyers.
Who’s Paying the Most?
The data highlights that U.S. nationals are not alone in their high spending. Swedes paid an average of €3,295/m², while Germans followed closely at €3,224/m². This marks a record high for both U.S. and German buyers, while Swedes previously set their own record at €3,330/m² in the first half of the year. Such figures suggest that these purchases are often for holiday homes or investment properties, rather than primary residences.
The Shift in Residency
Interestingly, the trend of foreign buyers is not solely about investment. The number of U.S. nationals residing in Spain has increased by 10,000 from 2022 to 2024. Many cite the political climate in the U.S., safety concerns, and a desire for a better quality of life as motivating factors for their move. This shift indicates that while some are investing in second homes, others are making Spain their primary residence.
Other Nationalities in the Market
Beyond the top three nationalities, several others are also paying above the average. Swiss buyers averaged €2,851/m², followed by Norwegians at €2,800/m² and Poles at €2,757/m². The Dutch, Russians, and Belgians also paid above the average, while the French, British, Italians, and Irish rounded out the list of those spending more than €2,000/m².
Conversely, some nationalities are paying significantly less. Chinese buyers averaged €2,160/m², while Portuguese buyers paid €2,050/m². Notably, Moroccans had the lowest average at €703/m², highlighting the stark contrasts in purchasing power among different nationalities.
The Volume of Foreign Purchases
In total, foreigners purchased 69,690 homes in Spain during the latter half of 2024, marking a 10.3% increase from the previous year. However, this represented only 19.5% of total property sales, a slight decline from the 21% recorded in 2023. British buyers led the pack with 6,048 properties, but other nationalities like the Polish and Chinese are increasing their presence in the market.
Government Response to the Housing Crisis
The surge in foreign property purchases comes at a time when Spain is grappling with a housing crisis. Recent government surveys indicate that housing affordability is the top concern for Spaniards. In response, the Spanish government has taken steps to limit foreign investment in real estate. The cancellation of the golden visa scheme, which granted residency to foreign buyers spending at least €500,000, is one such measure.
Additionally, Prime Minister Pedro Sánchez has proposed a 100% tax on non-resident non-EU buyers or even a ban on purchases for those without ties to Spain. The regional government of the Canary Islands has also sought EU assistance to restrict non-resident purchases, reflecting growing concerns about the impact of foreign buyers on local housing markets.
Conclusion
As the Spanish property market continues to evolve, the dynamics between local and foreign buyers remain complex. While affluent foreign nationals are driving prices higher, the implications for local residents and the broader housing crisis are significant. The ongoing discussions around policy changes indicate that this issue will remain at the forefront of Spanish society for the foreseeable future.
