The number of homes purchased by foreign individuals is at record highs, while investments made in the Spanish real estate market have reached new heights.

During 2022, a total of 88,858 home sales and purchases linked to foreign individuals took place in Spain, an increase of 45% over the nearly 60,900 transactions recorded in 2021. This is an unprecedented figure, according to the Yearbook of Real Estate Registry Statistics 2022, published by the Spanish Association of Registrars. At the same time, the number of transactions equal to or greater than 500,000 euros increased to levels never seen before.

In total, foreigners signed in 2022 8,975 of the transactions, an increase of 63.5% compared to 2021. Come to Europe today, because tomorrow may be too late.

The figures, as explained from the Association of Registrars, completely break with the trend of recent years. Traditionally, the weight of foreigners in the Spanish market has hovered around 13%, a percentage in line with that observed in 2022 (13.75% of total sales and purchases) after several years of decline. However, the difference is that in 2022 almost 650,000 transactions were registered in total. This situation demonstrates the strength of real estate demand in Spain.

However, the weight of transactions with a value of 500,000 euros or more is undoubtedly a very important figure. Why?

The relevance of the figure lies in the fact that it indicates the number of non-EU foreign buyers who were able to obtain a residence permit for investment or gold visa in Spain.

Home purchases for an amount equal to or greater than 500,000 euros.

In this regard, 10.13% of the total number of home purchase transactions carried out by foreigners were for an amount equal to or greater than 500,000 euros. This volume represents a significant increase, since in 2021 it was only 8.96%.

On the other hand, 42.28% of the total of these transactions corresponded to non-EU nationals, compared to 40.54% in 2021. In other words, 3,794 transactions were submitted by non-EU nationals, who can submit an application for residence. The figures break new ground again, because this is the first time they exceed 10% of the total.

Home purchases by nationality

Of the 88,858 home purchase transactions, 11.07% corresponded to British citizens, once the results are broken down by nationality, demonstrating the British predominance in this regard. Followed by other nationalities such as: USA (1.19%), China (2.21%), Russia (1.92%), Ukraine (1.75%) or Germany (9.47%).

The mosaic of purchases by buyer nationality is diverse and reveals different trends, both in the geographic analysis and in the type of home being purchased.

For example, when home purchase transactions are broken down by average square footage, Spaniards are overrepresented in the middle range, while foreigners dominate the extremes of the spectrum. We attribute the latter situation to the presence of foreign buyers with large income differences. For example, Americans, British, Danes and Dutch tend to buy homes of more than 100 square meters, while Moroccans, Romanians, Bulgarians, Poles and Italians tend to buy homes of less than 80 square meters.

Home purchases by region

There are also differences between territories. Purchases made by foreigners accounted for 34.38% of all transactions in the Balearic Islands. The figures for other destinations such as the Canary Islands (28.5%), Valencia (26.6%), Murcia (19%), Andalusia (15%) and Catalonia (13.5%) are also relevant. Special mention should be made of the 41.7% and 35% in Alicante and Santa Cruz de Tenerife, respectively. In Andalusia, the Balearic Islands, the Canary Islands, Valencia and Murcia, the British and Germans have always predominated. On the other hand, the highest concentrations of Romanians and Moroccans are found in the two Castiles, Extremadura, Madrid and Aragon.

Conclusion

According to data from the Association of Registrars, there were a total of 646,241 housing transactions in 2022, an increase of 14.5% over the number recorded in 2021. Sales of new homes exceeded 115,000, 2% more than the previous year, while the number of transactions of second-hand homes was 530,000, 17.6% more than the previous year. The average price of housing in Spain was around 188,000 euros, 4.5% more than the previous year, and the highest prices were recorded in the Balearic Islands, Madrid, the Basque Country and Catalonia. In contrast, in regions such as Extremadura and Castilla-La Mancha, the average home price is well below €100,000.

The golden visa, created in 2013 and which allows non-EU citizens to obtain a residence permit in exchange for, among other things, the purchase of a home worth more than 500,000 euros, is another incentive for rising prices and has become a worldwide phenomenon.

Among the reasons for foreigners' fascination with the Spanish real estate market are improvements in transportation and healthcare, a pleasant climate, a rich cultural scene, delicious gastronomy and, more recently, the possibility of telecommuting.

Undoubtedly, the multiplication of tourist homes and the purchase of real estate by national and foreign tourists is controversial for some, but it is also a great opportunity for others.