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House purchases by foreigners in the second half of 2021 return to pre-pandemic levels

Firmalex > Latest posts > House purchases by foreigners in the second half of 2021 return to pre-pandemic levels

They account for 18.6 % of all transactions, which corresponds to the period 2012-2019. The British lead the way with a share of almost 12 % of foreign transactions.

The Spanish real estate market continues to leave behind the lull caused by Covid-19 and is returning to the traditional figures of the years before the health and economic crisis. Foreign buyers are playing an important role in this recovery, increasing their property transactions by almost 42% year-on-year in the second half of 2021 and regaining their usual market share in Spain.

This is confirmed by data presented in April by the General Council of Notaries. The notaries admit that this increase is “very conditional”, as could be expected, due to the declines recorded in the second half of 2020. However, looking at the figures, the increase in this type of transaction shows a return to the years before the pandemic. Thus, transactions made by foreigners accounted for 18.6% of total sales and purchases at the national level, in line with the average recorded between 2012 and 2019 (18.7%).

Between July and December last year, the purchase and sale of vacant housing by foreigners increased by exactly 41.9% year-on-year to 63,934 transactions. The market had stalled in the first half (-37.3%) and the second half (-10.8%) of 2020.

Notaries explained that 54.8% of purchases and sales were made by foreigners, an increase of 27.4% from the previous year, while the remaining 45.2% of transactions were made by non-residents, an increase of 64.5%.

By nationality, the foreigners who bought the most houses were British, the group that traditionally comes first in Spain. They accounted for 11.8% of the total foreign transactions, a total of 7,560, followed by Germans (10.4%) and French (8.3%). The group of nationals, which includes all other non-EU foreigners, accounted for 11.4 %. Purchases by foreigners of all nationalities increased, but most strongly by Dutch (104.1 % compared to the previous year), Irish (99.3 %) and Germans (84.9 %).

In parallel, the highest average prices per square metre were paid by buyers from Sweden (2,752 euros per square metre), Denmark (2,750 euros), Germany (2,741 euros), the USA (2,601 euros) and Switzerland with 2,479 euros per square metre. The average price paid by foreigners overall (2,016 euros per square metre) was also exceeded by buyers from Norway, the Netherlands, Russia, France, Italy and Belgium.

The lowest prices were paid by Moroccans (688 euros per square metre), Romanians (990 euros) and Ecuadorians (1,087 euros).

Separated by residence and autonomy, the French were found to have the largest share of sales among non-resident foreigners in the two Castilian regions, Aragon, Catalonia, Extremadura, the Basque Country and Navarre. The Germans were the main buyers in the Archipelagos, Cantabria and Galicia, the British in Andalusia, Murcia and the Comunidad Valenciana, the Argentines in Asturias and the Americans in La Rioja and the Comunidad de Madrid. Among residents, Moroccan and Romanian nationals were the main buyers almost everywhere in the country, except in Galicia, the archipelagos and the Comunidad Valenciana.

Overall, all regions of the country recorded an increase in foreign transactions compared to the previous year. The Balearic Islands lead the way with an increase of 81.5%, followed by the Canary Islands (57%), Andalusia (55%), Cantabria (50.5%) and the Valencian Community (44.9%). Below the national average (41.9 %) was the increase in Catalonia, Asturias, Navarre, Murcia, Madrid, Castilla-La Mancha, Aragon, the Basque Country, La Rioja and Extremadura. Finally, Castilla y León and Galicia recorded growth of less than 10 %. The average price per square metre of the transactions carried out by these clients was 2,016 euros, a price increase of 14.3 % compared to the previous year. Non-resident foreigners again paid more for their homes (2,481 euros per square metre) than residents (1,567 euros per square metre) and nationals (1,503 euros per square metre).

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