Foreign Buyers Purchase a Quarter of the Coastal Properties in Spain

Foreign buyers purchase a quarter of the coastal properties in Spain

The Spanish residential market has seen a significant impact from foreign demand for home purchases, with a notable 19% of sales and purchases in 2023 being attributed to foreign buyers. This figure rises to 25% when focusing solely on coastal locations, including both first and second homes. Despite the decrease in overall transaction volume over the past year, foreign demand continues to play a crucial role in the market.

In particular, the demand for coastal properties from international buyers experienced a smaller decline of -8.8% compared to the -12% drop in national demand. This indicates that foreign interest in Spanish coastal homes remains relatively strong, standing at 39% above the average transaction volume during the peak market period of 2015-2019.

The data shows that resident foreigners have significantly increased their share of sales and purchases, with a particularly notable rise in the last two years. This trend is evident across various regions, with the exception of the Islands, and underscores the evolving dynamics of international demand in the Spanish residential market. With resident foreigners accounting for 49% of transactions by individuals of other nationalities, it is clear that their influence is a key factor in shaping the current landscape of the real estate sector.

Alicante, a popular destination among foreigners, experienced a decrease in sales transactions in 2023, along with other sought-after provinces such as Malaga, the Balearic Islands, and the Canary Islands. The Islands saw the most significant drop in transactions at -20.4%, while the Mediterranean and Atlantic coasts had more moderate decreases at -6.8% and -8.1% respectively. However, the North Coast saw an increase in foreign demand at 3.1%, albeit at a slower pace compared to previous years.

In terms of the nationalities of buyers, the United Kingdom, France, and Germany were the top three countries making purchases in 2023. However, both the UK and France saw a decrease in their share of transactions compared to the previous year. Conversely, buyers from Italy, Belgium, and Ireland saw an increase in their share of purchases. Additionally, there was a rise in transactions from countries such as Ukraine, Poland, Lithuania, Russia, China, the United States, and Argentina.

Overall, the distribution of sales transactions by foreigners in different provinces varied in 2023, with Alicante being a popular choice despite the overall decrease in transactions. The shifting trends in buyer nationalities reflect changes in the market dynamics, with some countries increasing their presence while others decrease. These fluctuations in foreign sales and purchases highlight the evolving landscape of real estate transactions in Spain.

Coastal housing prices experienced a significant increase of 5.7% year-on-year during the first quarter, reaching an average of 1,740 euros per square meter. This surge in prices indicates a strong price tension in the coastal housing market compared to the national average increase of 3.3%. The coastal regions are witnessing a higher rate of growth in property prices, reflecting the demand for housing in these sought-after areas.

Among the coastal territories, Malaga saw the largest price increase at 9.3%, followed by the Balearic Islands at 8.8% and Alicante at 7.2%. These regions are attracting buyers and investors due to various factors such as scenic beauty, amenities, and lifestyle offerings. The rise in housing prices in these areas signifies a growing interest in coastal properties, leading to a competitive market environment.

The data highlights the trend of coastal housing markets outperforming the national average in terms of price growth. Buyers looking for properties in coastal regions should be prepared for higher prices compared to the overall market. The significant price increases in Malaga, the Balearic Islands, and Alicante indicate a robust real estate market in these areas, making them attractive options for those seeking coastal living or investment opportunities.