Foreign buyers are crucial to any housing recovery in Spain, with the latest figures showing that they now make up 12% of the Spanish real estate market. According to an analysis of the latest figures from the Department of Housing by Mark Stucklin of Spanish Property Insight, the data is important as it is based on figures from the Notaires Association which are regarded as being more accurate than those from other sources.
He believes the figures are crucial because they separate buyers into Spanish residents, expat residents, and non-residents who, by definition, are buying second homes. ‘In the light of the new worldwide asset reporting requirements for residents of Spain, I wanted to clarify how important foreigners are these days to the Spanish property market,’ he explained. ‘Already 12% of the market, this is back at pre-crisis levels, so foreign buyers are growing fast in number, and could be critical to Spain’s moribund property market,’ he added.
The figures show that home purchases by expats living in Spain increased 25% last year, to 40,848, whilst sales to non-residents surged 42% to 3,603. In comparison, purchases by Spaniards rose just 2% even with the incentive to buy before mortgage tax credits expired at the start of 2013. Though sales to non-residents increased the most, they were still tiny in absolute terms, just 1% of the market. Expat buyers, on the other hand, bought 40,484 homes in Spain last year, 11% of the total, and up from 24,520 in 2009.
‘This shows that expat buyers, a group that includes all foreigners living in Spain, but is mainly comprised of Northern European climate migrants as opposed to economic migrants, will play a crucial role in any recovery,’ said Stucklin. ‘It’s always a minority group that starts the turnaround in every market as the herd comes later. As cash buyers from stronger economies, expats will be the ones who sow the seeds of the recovery in Spain, if they are allowed to,’ he pointed out.
Quote from PropertyCommunity.com : “My parents own a small apartment in Alicante, Spain, which they rent out during the year. They’ve been contacted by their agent (Alicante Sol) who said they are no longer renting out tourist homes, and focusing on just buying and selling property.”
One concern is Spain’s new law forcing expats to declare their worldwide assets which he believes could send the market into a tailspin. ‘It’s complex reporting requirements and disproportionate fines will put many, if not most foreigners with assets abroad, off the idea of living in Spain. Many expats already here will leave, if they can sell their homes. I am already hearing anecdotal evidence of the first signs of a stampede for the exit,’ he said. ‘If the Government does not make the reporting requirements less onerous for expats, I worry that sales to foreigners could collapse in the course of this year,’ he added.