Are Foreign Buyers the Problem?

What’s wrong with foreigners? Or, more specifically, what’s wrong with foreign property buyers in Spain? For the last few years there have been anti-foreign protests in various parts of Spain, predominantly in city centres and in high tourism areas such as Mallorca and the Costa del Sol - the word ‘saturated’ has been used to explain why Spain’s chronic housing shortage is real but are foreigners to blame? After analysing the data, I say no, they’re not. 

The emotion around this issue is understandable but the data tells a different story. We already knew at the start of 2025 that Spain’s Golden Visa scheme, aimed at attracting HNW individuals to invest in Spain, not just in property but also business starts up and other investments, was coming to an end in April 2025. However, the announcement, on January 13th 2025, that Pedro Sánchez’s government was considering a 100% property tax on non-EU property buyers was completely unexpected. Not satisfied with that, he went further on January 19th, talking about an outright ban of all non-EU, non-resident property purchasers in Spain. It’s worth pointing out this suggestion was made at a rally of his PSOE supporters and that he heads a minority government. To maintain his grip on the Presidency, he relies, in part, on hard-left coalition partners Sumar, not noted for being keen on private ownership of anything. Because of this, I did wonder if this announcement had more to do with political posturing than reality.  Maybe it’s time for a reality check.

The Reality Check

I realise that last statistic could be used as proof that Sánchez is right, the lack of affordable housing is the fault of those pesky, speculative foreigners. But I refute that by comparing 2006 overseas buyer numbers with 2025. Then we see the numbers have increased by an average 2.5% annually over two decades, The reality is there hasn’t been a dramatic increase in foreign buyers in recent years, just a fairly modest annual increase averaged over the whole period. The reality about the domestic market is that it’s still smaller in 2026 than in 2006.

When it comes to banning all or just some foreign buyers, maybe Sánchez is unaware that about 57% of foreign buyers today are resident in Spain. Therefore, they would be exempt from any ban or tax on non-resident foreign buyers wherever they come from, EU or non-EU.  I just can’t see banning them having any effect on the housing crisis. You only have to look at where all these ‘speculative’ foreigners buy and how much they spend to realise this is nonsense. The reality is the overseas and domestic sectors of Spain’s property market have always operated pretty much independently of each other and don’t directly compete for the same properties or even, the same locations.

Locations & Prices

Overseas buyers make up approximately 20% of Spain’s property market overall and about 73% of them head for the Med, either the mainland coastline facing the Mediterranean or to the Balearic Islands. Add the Canary Islands to the mix and that 73% rises to over 80%. It’s true that, in some locations, foreign buyer market share is way above the national average of 20% - e.g., 42% in Málaga province, 38% in the Balearics, and 51% in Alicante province. But in others, foreign market share is well below the national average, e.g., it’s 14.3% in Madrid, 15.5% in Málaga city, 6.6% in Seville and 6.8% in Granada. The impact of foreign buyers on the property market depends on where you look. 

There’s also a difference in spending power. The average spend per square metre by domestic buyers is currently €1,804, only 5.7% below the average a resident foreign buyer  is paying. Meanwhile the average spend by a foreign non-resident is €3,126 pm², the biggest spenders recently being non-resident Chinese citizens on €4,116 pm².  However, as only 15% of Chinese buyers are non-resident, equating to less than 800 in the last full year, it’s unlikely they’re having a major impact on the market. Banning them would achieve precisely nothing.

It’s easy to make headline announcements that pander to activist groups campaigning for fewer foreign buyers. It’s much harder to address the real cause of the problem - Spain’s chronic housing shortage, which can be traced back to the annihilation of the construction sector post-2008 and, until the supply/demand ratio is more balanced, nothing much is going to change. Fortunately, for foreigners planning to buy in Spain in 2026, Mr Sánchez has lots of other issues on his plate right now and banning certain buyers from the market seems to have moved to the back burner.

^© Barbara Wood

For more property market information please take a look at our Markets Reports. These cover the overall market and the regions we cover.  Go to our Locations page for more detailed information.