Spain has always been a favourite with foreign buyers and their market share generally accounts for around 30% of all sales. Travel restrictions due to the pandemic slowed foreign property investment in Spain, but with the gradual lifting on mobility, international buyers are back. So much so that some experts are predicting a surge of investment during the rest of 2021 and beyond into 2022.
Foreign property investment in Spain so far this year
Despite restrictions on mobility, international buyers have continued to purchase real estate in Spain this year. The Costa del Sol, Costa Blanca, Mallorca and Tenerife remain favourite destinations and within them, foreigners make up a significant percentage of buyers.
For example, in Q2 this year, foreign buyers represented 9.95% of the market on the Costa del Sol according to data from the Registrars Association. The figure is 0.23% higher than Q1, a small increase but nevertheless significant, particularly as travel to Spain was mostly restricted until late May.
Foreign real estate investment for the remainder of 2021
Analysts consulted in an article in the Idealista property portal generally agree that foreigners will return en masse to the Spanish property market. As a result, many believe that numbers for 2021 will be higher than 2020 and on a par with pre-pandemic levels.
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Why foreign interest in Spanish real estate?
One reason for the forecast surge in investment may lie behind the pent-up demand. Mobility restrictions have meant that many foreigners hoping to buy in Spain between March 2020 and summer 2021 saw their aspirations frustrated. As a result, they’re looking to purchase property as soon as travel prohibitions lift.
Lockdowns and lack of sunshine are other causes behind foreigners’ enthusiasm for property in Spain. This is particularly the case among Northern Europeans who suffered long periods of confinement and couldn’t enjoy warm temperatures.
A final explanation is found in the low property prices in Spain. For example, the resale market has seen a slight drop in prices since the pandemic arrived and bargains are available. On the other hand, new-build property prices have risen steadily over the last 18 months and show no signs of slowing down.
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Who’s investing in Spanish property?
British buyers have traditionally taken the largest slice of the market and this has not changed despite the pandemic and Brexit. However, their numbers have dropped slightly in most parts of Spain such as the Costa del Sol and Costa Blanca.
Behind them are other perennial markets such as the German and French. All three nationalities tend to buy second homes rather than permanent residences.
When it comes to investing in luxury homes, nationalities shift slightly. Prime residential property in Madrid, for example, is a favourite among North American, Latin-American and Asian buyers. It’s also worth noting that 30% of investment in high-end property in Madrid comes from large investment funds.
Invest in Spanish property with complete peace of mind
To ensure your investment in Spain goes smoothly and saves you time and stress, take advice from our expert professionals. Our conveyancing team at Costaluz Lawyers have been helping foreigners buy in Spain for over 15 years. Get in touch for a free consultation now.