International demand is once again one of the keys to the strength of the Spanish residential market. In 2022, foreigners already bought almost two out of 10 houses in our country (18.7%), according to Euroval data, above the years prior to the pandemic. In the first quarter of 2023, when there is already some contraction in activity due to the rise in mortgage interest rates, the registrars confirm that foreign demand for housing is still in force and stars in more than 23,300 transactions.
The demand for housing by foreigners in Spain has exceeded the previous data in 2022 , and after two years since the outbreak of the covid-19 crisis, it is once again at pre-pandemic levels, surpassing even those of 2018 and 2019. Purchases by foreign citizens, whether or not they were residents, has once again been key to the strength of the Spanish residential market, according to Euroval's Real Estate Situation Report 2023.
"In 2022, the weight of purchases by foreigners over total operations increases substantially. The weight of the purchase by foreigners, residents or not, in the housing market increases between 2021 and 2022, going from 15.3% to 18.7%", highlight from the appraiser.
The analysis confirms the strong concentration of foreign purchases in our country. In fact, three communities concentrate 65% of these. At the head, and well ahead of the others, is the Valencian Community: 30% of the houses bought by foreigners in our country are located here. Another 21% is in Andalusia and the remaining 14% in Catalonia. The Canary Islands, with 9% of foreign purchases, occupies the fourth position in this ranking, followed by Madrid (6%), the Balearic Islands (6%) and Murcia (5%).
According to its data by autonomous communities, the largest increases in the last two years have been seen in the Valencian Community, with 7.4 points of increase, going from 28.5% to 35.9%, and the Canary Islands, with more than six points of increase (from 30.8% to 37).
Behind, there have been softer increases in the large markets, but no less important in Andalusia (3.2 pp) followed by Murcia, with 2.7 pp more, Catalonia (2.5 pp), Balearic Islands (1.8 pp). with almost two points more and Madrid, going from 8% to 9.1%, 1.1 pp more.
"The acquisition of homes by foreigners has been one of the key factors in the stability and growth of the Spanish tourist-residential market, and is already in number of units above the values prior to the pandemic", specify from Euroval.
Only the percentage of 2015 (19.3%) exceeds that seen in 2022 (18.7%), but on absolute numbers, the 'sorpasso' of 2022 is unquestionable. While in 2015 77,530 homes were sold to foreigners, last year the figure reached 133,221 units, always with data from Euroval.
The recovery of foreign demand occurs at a delicate moment for the residential market of our country, says the report of the appraiser. "There is already some contraction as a result of international uncertainty and the increase in access to mortgage credit due to the rise in interest rates."
And it is that with data from the Property Registrars, foreign demand for housing has maintained its strength, with a percentage of 14.52% of total purchases. That is, more than 23,300 transactions of the just over 161,000 operations between January and March of this year.
In absolute terms, the number of purchases by foreigners has been higher than the previous quarter, despite the fall in the percentage compared to previous quarters. And, in percentage terms, it represents the fourth highest result in the historical series, after 15.92% in Q3 2022, 14.71% in Q4 2022 and 14.66% in Q2 2022.
"Seasonal factors must be considered in the interpretation of the results, to the extent that summer periods tend to provide greater results," say the registrars in their latest quarterly real estate report.
The highest weights have been reached in the Balearic Islands (29.16%), Valencian Community (28.35%), Canary Islands (28.30%), Murcia (21.44%), Catalonia (15.60%) and Andalusia (14.64%).
While by nationality, the most prominent have been the British (9.48%), Germans (7.48%), French (7.23%), Moroccans (5.39%), Italians (5.37%), Romanians (5.36%) and Belgians (5.31%).
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