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14.4% of all Spanish home sales inscribed in the Land Registry in the last quarter (Q4) of 2015 involved a foreign buyer, reveals the latest report from the College of Property Registrars (Registradores). That is a record high for the share of foreign buyers in the Spanish property market.
For the year as a whole, foreign demand as a percentage of the market was 13% last year, fractionally down from 13.5% from 2014. More than one in ten properties sold in Spain today is bought by a foreigner, including both residents and non-residents.
In absolute terms, foreigners bought 46,000 homes in Spain last year, 12,000 in the last quarter alone. Foreign demand was up 11% last year, and 12% in the last quarter, whilst local demand grew by only 7% in the last quarter.
DEMAND BY NATIONALITY
The British were once again the biggest group of buyers by a large margin with 9,956 acquisitions last year (21% of foreign demand last year), followed by the French with 4,116 (9%), and the Germans with 3,445 (7%).
What is remarkable is how much British demand surged in the last two quarters of the year, which was not the case with other nationalities. Russian demand declined steadily throughout the year – in both cases the change was influenced by exchange rates, with the Pound strengthening and the Rouble weakening.
BRITISH DEMAND SURGES
The big story from last year’s foreign sales figures was the 81% increase in British demand compared to the year before. The British are clearly back to being the dominant force in foreign demand, though not yet as dominant as they were in the boom years.
Low Spanish property prices (down around 50% from the peak) plus a stronger Pound are no doubt fueling British demand.
THE NEXT FEW MONTHS
Fears of a Brexit referendum result in June creating uncertainty about the UK’s future in Europe, and a weaker Pound in the short term, could encourage British buyers to sit on the sidelines for the next few months. So don’t be surprised if British demand is significantly down in Q1 of this year when the figures come out. We do expect to see an immediate impact after the referendum however no one can predict the outcome but as the EU is the UK’s main trading partner and the majority of Brits in this day and age wanting freedom of movement we should see positive results for the property market in Spain. A lot of British are naturally going to wait and see the outcome before committing and the timing will also see a strengthening of Sterling against the Euro. For savvy investors timing is everything and deals will be struck in the lead up to June as buyers will be in a stronger position and may be able to in some cases offset exchange rate losses against negotiating power.
At the other end of the scale Russian demand was hammered last year, down 43%, thanks to serious economic problems at home pushing the Ruble down around 16% in the last year, and 50% in the last 3 years, leaving many Russians in a weaker position when transferring funds abroad with far less money to spend on their holiday home in the sun.