Large parts of the Spanish property market may be in depression, but foreign buyers are finding some fantastic opportunities around the country’s coast and in the cities. Recently, the Bank of Spain released data showing that, for the first time since 2004, international property purchases in 2013 exceeded €6bn (approx. £5 billion).
Furthermore, information from Knight Frank relating to their Global Property Search , the first three months of 2014 saw a 29% increase in searches for Spanish property compared to the same period in 2013.
This is almost surprising given that property sales to domestic buyers are distinctly unimpressive at present. According to Spanish Property Insight’s Mark Stucklin, “Foreigners are the only dynamic segment of the market today.”
Some of the purchases are coming from expats keen to purchase Spanish property for sale and relocate for its affordable living costs, warm weather, and famous beaches. However, a large part of the rise in foreign buying is down to individuals and companies purchasing properties as investments. According to Stucklin, “The likes of Goldman Sachs, JP Morgan, Blackstone, George Soros and Bill Gates are all getting into Spanish real estate.”
Britain remains the biggest single source of foreign buyers for Spanish Property. While this fact is not quite so pronounced as it was in 2010 when 34% of sales to foreign investors came from Britain, the country still accounts for 15% and has the largest single share. This is followed by 10% for France and 9% made to Russian investors.
Part of the reason for investors from Britain continuing to put funds into Spanish property is a strong exchange rate. Currently, the pound is very strong against the euro when compared to rates from the recent past, and this means that British buyers can get more for their money. Of course, this would be meaningless if the opportunities on offer were not attractive ones. However, the Eurozone crisis has led to prices reaching very affordable levels, and now that it is believed the worst part of this crisis is through they seem poised to rise again, and demand will likely rise to match.
Demand may also be fed by the “golden visa” scheme offered by the Spanish government, which allows EU residents buying a property valued above the €500,000 mark to gain easy legal residency. There are currently no concrete figures as to the impact this has made, but a similar scheme in Portugal has reportedly been met with success. Spain has long been popular with expatriates, particularly retirees, and in Barcelona it is reported that four out of ten property purchases are for a second home. As such, extra encouragements for international settlers are not likely to go unnoticed. In the more premium coastal areas such as those along the Costa del Sol, including Malaga and Marbella, meanwhile, Stucklin claims that a shortage of property supply is already starting to emerge.