Foreign real estate investors are one of the major players in the Spanish market. Among other factors, those who acquire an apartment or villa in our country for at least 500,000 euros qualify for the Golden Visa, a visa that allows them to reside and work without any inconvenience. This is one of the methods used by citizens from outside the European Union seeking to move to our country, especially Latin American millionaires in recent years.

According to the historical average, international citizens account for between 12% and 14% of all completed property sales and purchases. According to the report on Housing on the Coast, prepared by the appraiser Tinsa, “the buyer of second homes from other countries carry a very significant weight in the coastal markets”.

Where are the most popular areas?” “The Islands stand out, where 1/3 of the sales are by foreigners and, of them, more than a third are residents. The Mediterranean coast is also relevant, where 1/5 of buyers are foreigners and half of them are residents in the country,” the study points out. On the other hand, the northern coast of Spain has a national market, as does the Atlantic coast of Andalusia.

According to 2021 closing data provided by the Ministry of Transport, Mobility and Urban Agenda, Alicante was the province where foreigners bought the most, 20,000 homes and a market share of over 40%. Behind are Malaga (12,500), Barcelona (8,000) and the Balearic Islands (7,000).

Foreigners bought more in 2022

In the absence of final data for 2022, foreigners accelerated real estate purchases during the first three quarters of last year. Up to September, internationals accumulated six consecutive quarters buying more each time. The British are the main players, with the Germans and French next in the ranking. In total, sales by foreign nationals reached 72,395 units: 21,638 in the first quarter, 24,029 in the second quarter and 26,728 in the third quarter.

Between January and March, they accounted for 8.63% of all acquisitions, surpassing the 8.12% of 2012 and staying close to the highs reached in 2006, with 8.97%. During those months, Russians accounted for 9% of market transactions only behind the British. In the second quarter, according to the Association of Registrars, international buyers registered a ten-year high, accounting for nearly 15% of all transactions. The Balearic Islands (34.7%), the Canary Islands (34.2%) and the Valencian Community (27.7%) were the most popular areas and accounted for the largest number of transactions. Finally, between July and September, the maximum level of the historical data was reached with 15.9% of all registered sales and purchases.

According to a report by the real estate portal Idealista published in the middle of last year, which analyzes preferences by nationalities; the favorite municipalities of the Germans are Palma, Calviá, Barcelona, Torrevieja and Llucmajor. The French opt for Barcelona, La Moraleja (Madrid), Valencia and Alicante; while the British prefer Madrid and Barcelona as well as towns on the Costa del Sol such as Marbella or Mijas.

Impact of the war in Ukraine on real estate

The last few years have been complex for foreigners buying and selling real estate, but even so, the data show resilience. When the Covid-19 health crisis broke out in the early 2020s, all transactions were halted because those interested in acquiring a second home could not travel to Spain. Then, as the measures were relaxed, a certain reactivation of this market was seen. The quarter with the least international activity since 2013 was the second quarter of 2020, with only 8,160 signatures. However, it was widespread, as it was also the worst in the domestic market.

Once pre-pandemic levels were recovered in 2022, the Russian invasion of Ukraine and the sanctions adopted by the European Union in retaliation to this aggression, the Russian investment in real estate in Spain disappeared as a result. The 27 agreed to ban operations with the Russian Central Bank, access to the SWIFT system and new investments by the big oligarchs. “The Russians, during the last ten years, show an upward trend until 2014, the year of the Crimean invasion, showing a sharp decline in 2015. The subsequent slow recovery was broken in 2020 with the health crisis. Predictably, the improvement in 2021 will reverse its trend in 2022, due to international sanctions,” Registrars noted earlier this year.

On the contrary, countries neighboring the conflict, such as Poland, have increased their purchases in Spain. As reported by El Confidencial, a third of the acquisitions in the Intempo skyscraper in Benidorm and half of the buyers of the Sierra Blanca developer are of Polish origin; although, for the moment, in gross figures it does not have much impact on the total statistics.