According to the latest figures available from the Spanish Land Registrar's Association for the final quarter of last year, foreign demand for Spanish residential real estate grew sharply, as British buyers returned in considerable numbers. Spain's overall housing market expanded by 19.8% in the last quarter of 2014, with 111,921 home sales, which was the highest fourth quarter level since the recovery of the housing market began in 2015.
Foreign buyers completed 15,266 purchases, the highest level in a Q4 scenario since the housing market in Spain last peaked in 2007.
Increased demand came from a 19.7% surge in domestic demand and a 20.4% rise in foreign demand, compared to the same quarter in 2016. The surge in foreign demand meant that it was actually representing 13.6% of the overall Spanish housing market, a high last seen in record-breaking 2007.
Purchases made by foreigners were led by British buyers with 2,384 registered property purchases in the quarter, followed by the French with 1,242 and German buyers with 1,198. This means British buyers still commanded a 16% share of the foreign demand, while the French represented just 8% and the Germans also 8%. Apart from these key sources, Spain's housing market found buyers around the world, and foreign demand represented 42% of the overall market.
While German demand grew by a relatively modest 3.4%, Swiss demand actually went down by 16.1%, which can perhaps be explained by the exceptional rise in property prices in Switzerland itself. Germany also saw its own property prices soar, perhaps a reason why Germans preferred to invest in their own housing market rather than invest abroad last year. Paris home prices are also soaring thanks to international investment flooding in - another reason why perhaps French buyers are buying at home rather than in Spain at present. Another reason for a decline in Swiss buyer numbers is that the France fell by 10% compared to the Euro in the second part of last year.
Demand from Belgium, Britain and Sweden, however, rose sharply, especially as Britons are currently scrambling to retain a foothold in an EU country so they can qualify for "free movement" and living in the EU country of their choice.
The Registrar's Association also revealed that house prices in Spain grew by 7.6% last year, according to their index and repeat sale methodology. The final quarter of the year saw a robust performance of Spanish homes and with no threats other than the Catalonia one brewing on the horizon, Spain's housing market should continue with its meteoric recovery this year, for the market has certainly consolidated and is showing signs of expansion too.
Land Registry figures also showed that overall sales were up by 16% last year, the fourth and largest consecutive year of growth, according to the National Institute of Statistics (INE), which bases its data on the figures collected by the Land Registry.
In Total, there were 418,915 Spanish home sales recorded by the Land Registry in 2017 (or 464,423 if you include homes subsidised by the Government, known as VPO). It was the first time that sales rose well above the 400,000 mark since 2008, when the property boom in Spain came to an abrupt end.
By region where foreigners tend to buy, sales rose the most in Andalusia's Granada province, which offers homes at the Costa Tropical, in Granada city and in the Sierra Nevada ski resorts. In Granada province, sales were up by 27%, while in Malaga province, also in Andalusia, sales were up 15% in December 2017. At the Costa Blanca in Alicante province sales shot up by 17%, and in the Balearics, a favourite destination for German buyers, sales rose by 14%. Only Almeria province recorded a fall of 6%.
As to British buyers returning in greater numbers: although demand is down from 24.2% market share in the final quarter of 2015, British demand rose from 14.7% of the foreign market in Q3 2017 to 15.6% in Q4 2017, suggesting that so far Brexit has had a limited impact on this key market. As the realities of Brexit are beginning to bite though, more Brits are taking the plunge to buy a bolthole abroad, applying for EU passports in countries they are entitled to apply in due to family history. What is limiting a greater number of Brits is the weak pound and inflation back home.