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Are Overseas Buyers still buying? New figures suggest the answer is yes

Overseas buyers in 2021


So many questions about the property market in SpainAre overseas buyers in 2021 still heading for Spain? According to recent statistics from the notaries the answer seems to be yes. For the three years prior to the appearance of Covid-19, 2017-2019, the overseas property market in Spain was at an all-time high.  In each of those three years the number of overseas buyers had topped 100,000. That barrier was broken in 2017 (100,116), the all-time record was in 2018 (103,677) followed by a slight dip in 2019 to 102,264.  However, the 2nd half of 2019 was the best on record at 50,534 so everything was looking good for 2020. Then Covid-19 arrived.

Spain’s Property Market Needs Overseas Buyers

It’s also interesting to note just how important the overseas sector has become for Spain’s property market since the 2008 meltdown. In 2007, the last full year before the property market collapsed, the total number of international buyers was 50 674. That’s only 12% higher that the 2nd half 2019. And since numbers started to grow again in 2012 every year has been up on the previous year until Covid-19 arrived.

The Missing Overseas Buyers in 2020

The full-year 2020 statistics showed a total of 77,496 overseas buyers. If we take an average count of overseas buyers in the three years before the pandemic arrived it shows that about 25,000 foreigners who could have been expected to buy in 2020 didn’t.  And now we have the statistics from the notaries for the 1st half of 2021 we can estimate that about 30,000 overseas buyers went missing in the period March 2020 – June 2021. This covers when lockdowns and travel restrictions were at their peak.  However, the same statistics indicate that overseas buyer numbers are bouncing back strongly. If we take the average 1st half figures for the three years prior to the pandemic we see that the 2021 comparable of 47,683 is down only 8%.

Not Just Numbers – It’s Money As Well

As well as the number of overseas buyers in Spain there’s another reason they are important in the property market. They spend more. Typically, foreign buyers pay more per square metre than the national average. For example, the average spend by a foreign buyer in 2020 was €1,777 per m2, almost 20% higher than the national average of €1,439.  In the more expensive locations where foreigners buy in large numbers the difference is even more noticeable.  In the Balearics the average per m2 spend by foreigners is more than double the national average.

So it’s encouraging that these latest statistics show this trend is continuing. Anyone involved in the property market in the overseas property hotspots has seen prices rising during 2021 and now we have the proof. If we define the overseas market hotspots as the mainland Mediterranean coasts plus the Balearic and Canary Islands the average price per m2 paid by foreigners in the 1st half of 2021 rose in all of them with the exception of Cataluña.  Here it was down 1.1% while it rose 11% in the Balearics and 6.3% in Andalucía.  The fact that the biggest rises were in two of the most expensive overseas hotspots also provides evidence that much of the activity in the overseas sector is at the top end of the market.  That’s certainly how the market has felt during 2021.

Catch Up Plus New Demand

However, these latest statistics for the 1st half year can’t tell us how many of the 47,683 overseas buyers in 2021 were some of the missing 30,000 and how many were new to the market. Certainly the market feels very busy with a lot of people entering the market at the same time. Some will be playing catch-up from the lockdown and travel restricted periods. But for that they would have been part of 2020 statistics. Now they are showing up in the 1st half 2021 figures together with normal new demand.  This is definitely creating a supply-side problem, above all in the resale sector. And in addition to normal levels of new demand we are hearing buyers tell us they are bringing forward their plans to buy in Spain. Some are looking for a second home but we are also seeing buyers who are looking at a Spanish property as a possible ‘work from home’ base. 

As the notaries stats are compiled half-yearly there is always a long wait to get the full-year figures. However, when they are released in May of 2022 I’m thinking we may see the total of overseas buyers in 2021 hovering around the 100,000 again. It’s true 2nd half figures are usually lower than 1st half. Nevertheless, I predict they will show a surge of oversea buyers between June and December. In particular, I expect to see British numbers up sharply because travel restrictions were still in place until August. Even so, the British still managed to beat both the Germans and French in deals done in the 1st half of 2021.

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.

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