Real estate in Spain is one of the most investment-attractive property markets in Europe, and the high demand from investors in 2021 is proof of this. The number of transactions with both Spanish and overseas buyers has been growing rapidly, despite the consequences of the COVID-19 pandemic. Find out how the coronavirus infection has boosted demand from foreign investors, and which countries are the most active in the Spanish housing market.
Content:
- The pandemic has given a new impetus to overseas demand
- What nationalities bought a property in Spain?
- Demand by region of Spain
- Foreign expenditures by nationality and region
- Is it worth investing in Spanish real estate in 2022?
The pandemic has given a new impetus to overseas demand
The latest report of the Spanish Association of Notaries shows that 2021 was a record year for the demand in the country's real estate market from foreign investors. The market has regained the high ground lost as a result of the COVID-19 pandemic.
According to the data, foreign buyers concluded 111,743 transactions in the Spanish real estate market last year. This is 52% more than in 2020, and 9% more than in 2019. In other words, 2021 brought the best indicators in demand from investors from other countries in the history of the market.
In terms of market share, overseas buyers accounted for 17% of the Spanish residential real estate market in 2021, compared to 16.5% in 2020. However, the figures did not reach the record of 2015, when citizens of other countries participated in 20% of the total number of transactions.
What nationalities bought a property in Spain?
Analyzing the nationalities of investors who bought houses in Spain in 2021, shows that among the countries investors came from, the UK is leading with 12,186 transactions (+25% year-on-year). It is followed by Germany with 10,868 deals (+81% year-on-year). Although the British form the largest sales market, the Germans are ahead of them in growth rates. If the annual difference remains the same, Germany will become the largest Spanish real estate market share-holders in 2022.
In 2021, Germans have become the largest group of holiday home buyers in Spain, with an almost 100% annual growth rate. In this segment, they have significantly outperformed the British with weak indicators (only +17% to the 2020 level). Many experts believe that if the COVID-19 pandemic had never happened, due to Brexit, the growth in demand from the UK in 2021 would have been negative.
Demand by region of Spain
The data of the notaries also allows us to see how foreign demand was distributed across the regions of the country. The Valencian Community, where the Costa Blanca region is located, has become the most popular destination with 29,000 sales (+40% year-on-year). This is followed by the largely autonomous region of Andalusia, which is home to the Costa del Sol, with 22,625 deals (+53% year-on-year).
Almost 90% of all foreign demand is concentrated in six regions of Spain:
- Valencian Community (26% of the market).
- Andalusia (20% of the market).
- Catalonia (16% of the market).
- Madrid (8% of the market).
- Canary Islands (7% of the market).
- Balearic Islands (6.5% of the market).
- Murcia (5% of the market).
Of these regions, the highest growth rate was in the Balearic Islands (+77%) and Andalusia (+53%).
Foreign expenditures by nationality and region
Statistics for 2021 also show how much foreigners spent on Spanish real estate by nationality and region. The Swedes had the highest expenses, paying an average of 2760 euros per square meter. Then, there are the Danes, Germans, and Swiss. The British spent above average – 1,887 euros per square meter. Migrants from Romania and Morocco have the lowest expenditures.
By region, the Balearic Islands had the highest expenses, where foreign buyers in 2021 bought real estate at an average price of 3,689 euros per square meter.
Is it worth investing in Spanish real estate in 2022?
The data of the Association of Notaries confirmed that 2021 was a successful year for the Spanish housing market. Rapidly growing overseas demand and a record number of sales helped it regain the positions lost as a result of the COVID-19 pandemic that began in 2020.
While residential properties in the country continue to attract the attention of investors and end users from all over the world, experts agree that the local market will continue to grow, which makes buying houses or apartments in Spain a profitable solution.