Foreigners buy one in five properties in Spain

As amazing as it may sound, foreigners bought more than 100.000 properties in Spain last year (see article on Fotocasa).  To be exact, foreign buyers purchased 102.678 Spanish properties. This was 11% more than the year before. And the forecasts show that 2018 will beat this record.

Are you interested in the nationalities of foreign buyers in Spain ? Feel free to read this article discussing the nationalities of the foreigners buying in Spain, as well as the provinces and cities where they most buy,

Seven years of growth: foreign buyers can’t stop loving Spain

Not less than 102.678 properties purchased by foreigners in Spain in 2017 (source). Considering that this is simply twice as much as in 2012, foreign buyers have never been more important in Spain’s real estate market.

What budget are foreign buyers spending on Spanish properties?

According to Fotocasa (leading property portal in Spain, with Idealista), Spanish buyers have a budget of 166.000 euros to buy a property in Spain. However, the average price of a property listed on the property portals is 241.145 euros. A slight difference of 75.000 euros. In other terms, properties are listed for a price that is 45% too expensive compared to the budget Spanish buyers have to spend.

However foreign buyers can spend more. Indeed, the average price paid by a foreigner was at 1.717€ per square meter (2nd semester 2017). What’s more, the non-resident paid 2.027€/m2 while resident foreigners paid 1.420 €/m2.

Foreigners spent 20 billion euros on Spanish properties in 2017

According to Government Data (source), foreigners buy properties for an average transaction price of 162.748€. As foreigners purchased 102.678 properties in Spain in 2017, this would mean that foreigners bought for  16.710.639.144 € worth of property. Or 16 billion euros, to make it simple.

Actually this estimation is too low, because this figure of 162.748€ considers the average price paid by a resident foreigner only. As discussed, the non-resident paid 2.027€/m2 while resident foreigners paid 1.420 €/m2. And the average foreigner paid 1.717€ per square meter.

Therefore, we can reevaluate the average price paid by 20.9% (1420€ to 1717€ /m2). Consequently, foreign buyers purchased  20.203.162.725 €. Simply put, this is 20 billion euros of Spanish properties bought by international buyers.

Why buying a property in Spain is a good investment

I personally bought a property in Valencia capital recently for 75.000 euros, a 85 square meters flat, as a rental investment. And I would recommend you to do the same, due to some simple economic reasons:

• Spain was hit hard by the crisis in 2009
• Banks made it way more difficult for buyers to purchase properties
• Property prices have fallen, and are surely going to recover progressively their 2009 prices

Just one schema to help you understand: the evolution of the real estate prices in Valencia (see below).

Therefore it’s not surprising that foreigners now represent 1 in 5 buyers in Spain. Indeed it is a good time to invest in the Spanish real estate market.

If you are looking to buy a property in Spain, feel free to get in touch! I’m happy to discuss with you and give you some advice and free tips.