Foreign demand for housing in Spain has surged since the pandemic, with foreigners now representing a significant share of real estate transactions. According to the Ministry of Housing and Urban Agenda (MIVAU), foreigners purchased 125,857 homes in the trailing 12 months to Q3 2024, accounting for 18.4% of total sales, a 30.7% increase from 2019. This has made foreign demand a key driver of Spain’s current real estate boom, particularly as immigration trends continue to rise.
Differences Between Resident and Non-Resident Foreign Buyers
There is a distinct difference in purchasing behavior between foreigners residing in Spain and those from abroad. Non-residents generally buy properties for vacation purposes and tend to favor tourist-centric areas, while resident foreigners tend to purchase homes for work or educational reasons, often choosing urban areas. Non-resident foreign buyers also tend to invest in more expensive properties, paying an average of €2,895 per square meter, compared to €1,734 per square meter for resident foreigners.
In terms of nationalities, non-resident foreign buyers are predominantly from Europe, with British, German, Dutch, Belgian, and French nationals making up 48.5% of purchases. On the other hand, Moroccans, Romanians, and Italians are the largest groups among foreign residents.
Post-Pandemic Recovery and Growth
Sales to non-residents were significantly impacted during the pandemic, dropping by 30.2% in 2020. However, there was a rapid rebound in 2021 and 2022, with sales surpassing pre-pandemic levels. The demand from resident foreigners also saw an uptick, spurred by the rise in international migration and job opportunities in Spain. In 2023, while the rise in interest rates led to a decline in overall sales, resident foreigners saw a more moderate decline of 4.7% compared to 12.9% for non-residents.
Regional Variations in Foreign Demand
The demand for properties from foreigners is concentrated in specific regions of Spain. The most popular areas include tourist hotspots like the Mediterranean coast and islands, as well as major urban centers such as Barcelona and Madrid. Provinces like Alicante lead the charge, with foreigners making up nearly half of all property sales. In tourist regions such as Málaga and the Balearic Islands, non-residents represent a substantial proportion of buyers.
Impact of the End of Golden Visas
The Spanish government has announced the end of the Golden Visa program, which granted residence permits to non-EU citizens who invested in Spanish real estate worth over €500,000. While this change, set to take effect in April 2025, will impact a small portion of the market, the overall effect on the housing sector is expected to be minimal. Golden Visas accounted for only a small fraction of total property transactions, with the majority of recipients coming from countries such as China, Russia, the United Kingdom, and the USA.
In conclusion, foreign demand continues to play a crucial role in Spain’s housing market recovery post-pandemic. The demand from both resident and non-resident foreigners remains strong, with significant regional and price differences shaping the landscape. While the end of Golden Visas may have some effects, it is unlikely to significantly disrupt the broader market trends.
Related Topics:
Green Courte Partners Expands with Strategic Acquisition in Tennessee
Finding Joy in Real Estate: Embracing Authenticity Over Luxury Listings
Buffalo’s Real Estate Boom: A Hotspot for 2025 Investment Opportunities
