Spanish non-resident overseas home sales up 43%

Spain

Overseas Spanish property buyer numbers have jumped by more than two-fifths year-on-year – with sales to Belgians rising fast.

Non-resident foreigners bought 43% more Spanish homes in the second quarter of 2013 than the same time in 2012, latest figures from the General Council of Notaries show.

The increase in Belgian buyers puzzles Spanish market expert Mark Stücklin. “I’m not sure what’s driving the big increase in Belgian demand for Spanish property.”

Overall, foreigners purchased 14,593 homes in Spain during the second quarter of the year, up 23pc compared to the same time last year, according to figures based on deeds witnessed by notaries.

Non-residents bought by far the most, with foreigners resident in Spain accounting for 4% more purchases annually.

In total, non-residents accounted for 55% of foreign demand, around 8,030 property purchases, and residents were responsible for 45%, around 6,570 homes, Mr Stücklin explains.

Leading the way in increases by non-resident purchasers were the Belgians, up 78% on last year, followed by the French (+70%) the Germans (+35%) and British (25%). The Belgians also topped increased demand amongst foreign residents, up 42%, followed by Moroccans (+40%), Russians (+21%), French (+8%), and Germans (5%). Purchases from buyers from all other nations fell.

Britons still are the biggest foreign purchasers, but their market share has shrunk from 39% in the last three months of 2007 to 15% now. However, they the still the biggest group of buyers, followed by the French (11%), Russians (9%), Germans (8%), and the Belgians (8%).

Mark Stucklin, of Spanish Property Insight, says the notary statistics contradict data from the Department of Housing, which state that non-residents are just a small part of foreign demand.

“The government figures say that the vast majority of foreigners who buy property in Spain are also living there as residents, which anyone in the property business knows is plainly untrue.

“Talk to any agent selling Spanish property to foreign buyers and they will tell you that most of their clients are non-resident, to the tune of eighty per cent in many cases. It looks to me like the Housing Department’s figures are way off target, which is bad news as how are they going to formulate a sensible policy on such an important question as foreigners buying property in Spain which is vital to the economy, if they don’t know what’s really going on?”

According to the government statistics, just 1,086 non-resident foreigners bought property in Spain in the second quarter of 2013, a far cry from the almost 5,000 in the same period of 2006. “I don’t doubt for a second that the number of foreign buyers is down from the peak, but I do doubt the official breakdown between resident and non-resident buyers,” says Mr Stucklin.

The Housing Department use figures from the notaries, so there should not be a huge discrepancy. One reason could be that the registrars only include non-residents in their figures, whilst the notaries include both and the registrars count properties sold, whilst the notaries count buyers.

“So if a British couple living in Alicante, and classified as resident, buy a home there, the notaries count that as two foreign (resident) buyers, whilst the registrars wouldn’t count them as foreign buyers at all.”

Mr Stucklin tells OPP Connect that property values will decline further. “I think average house prices will continue falling for a couple of years yet. However, I don’t think prime property in the best areas will fall any further.”

He believes the new ‘Golden Visa’ scheme, which includes property and land worth €500,000 will impact the Spanish market’s price structure, but he warns investors to take care over their property purchase.

“I think that the investor residency laws will definitely have a notable impact in the €500k plus segment, perhaps an even bigger impact on prices between €450k and €500k, which will disappear. I think a lot of these investors will make the mistake of focusing on the residency permit, not the quality of the investment. But I doubt it will have much impact on the overall situation.”

Meanwhile, Richard Way, Editor at The Overseas Guides Company, warns those who are thinking of emigrating to Spain and other nations to factor in fuel costs.

“In Cyprus, for example, the cost of electricity is one of the highest in Europe and in terms of year-round sun, once you are off the coast, winters can be very chilly –  and you will require heating!

“Similarly, in inland Spain and in the northern parts, winters can colder than the UK – meaning expats will still need to fork out on heating bills.”

For more details, see www.spanishpropertyinsight.com.