Foreign Buyers Fuel Spain’s Housing Market Surge

Foreign buyers have once again demonstrated their unwavering interest in Spain’s housing market, with transactions reaching an impressive 24,791 by March, according to the latest quarterly Property Registry Statistics published by the Property Registrars. This figure marks the fourth-best result in the historical series, showcasing a robust demand that continues to support high levels of property sales activity.

A Slight Dip in Yearly Comparisons

While the current figures are commendable, they do reflect a 3.2% decrease compared to the same period last year, when foreign buyers completed over 25,600 purchases—the second-highest level ever recorded. Despite this slight dip, the ongoing interest from overseas buyers remains a fundamental pillar of the market, as noted in the Registrars’ report.

Who’s Buying? A Breakdown of Foreign Transactions

Foreign buyers accounted for a significant portion of international property transactions, with 58.3% attributed to citizens from the European Union and an additional 16.8% from other European countries. Buyers from Africa, Asia, South America, and other regions made up smaller shares, with 9.1%, 6.5%, 5.7%, and 3.6%, respectively.

Among the foreign buyers, British nationals led the charge, making up 6.8% of all foreign transactions. They were closely followed by buyers from the Netherlands (6.6%), Morocco (6.2%), Germany (6%), Italy (5.5%), and Romania and France (both at 5.2%). In absolute numbers, this translated to 1,668 purchases by Britons, 1,604 by Dutch nationals, and 1,518 by Moroccans, among others.

Regional Insights: Where Are Foreign Buyers Focusing?

Diving deeper into regional trends, foreign purchases increased in 12 autonomous communities quarter on quarter. The Balearic Islands saw the most significant growth at 28.9%, followed closely by the Valencian Community (28.2%) and the Canary Islands (22.8%). Other regions like Murcia (21.7%), Catalonia (15.4%), and Andalusia (13.2%) also experienced notable increases.

At the provincial level, foreign buyers accounted for over a third of all transactions in key markets such as Alicante (44.6%) and Málaga (34.3%). Their presence was also significant in the Balearic Islands (28.9%), Santa Cruz de Tenerife (26%), Girona (24.7%), and Murcia (21.7%).

The Registrars highlighted that the intensity of tourism in these regions plays a crucial role in determining the weight of foreign buyers in property purchases. The provinces with the highest shares are predominantly located along the Mediterranean coast and in island regions with strong tourism demand.

Rising Property Prices Amidst Fewer Sales

As foreign interest continues to shape the market, property prices have reached record highs. The average property price surged by 8.9% year on year in the first quarter, hitting €2,429 per square metre—the highest ever recorded. Despite this increase, home sales saw a slight decline, falling 1.9% year on year to a total of 701,828 transactions, still the highest level since the third quarter of 2007.

When examining property types, prices for existing homes rose by 9.6% to €2,294 per square metre, while new-build prices increased by 6.9% to €2,495 per square metre. This trend indicates a strong demand for both existing and new properties, with new-build sales growing by 7.2% quarter on quarter.

Mortgage Trends: A Growing Reliance

In the first quarter, the number of home mortgages registered rose by 15.2% year on year, totaling 513,092 mortgages on residential properties. Notably, 133,618 mortgages were recorded in just the first three months of the year, accounting for around 75% of all property sales during that period.

The regions leading in mortgage registrations included Andalusia with 27,270 mortgages, followed by Catalonia (24,254), the Community of Madrid (20,379), and the Valencian Community (15,640). Additionally, mortgage debt per square metre saw its twelfth consecutive increase, rising by 2.6% to an average of €1,808 per square metre.

The dynamics of Spain’s housing market continue to evolve, driven by foreign interest and rising property prices, while the reliance on mortgages underscores the ongoing demand for residential properties across the country.