23 October, 2014

By VIVA Team

In some parts of Spain, foreign buyers comprise the majority of property transactions

The number of unsold properties on the Spanish market has fallen by 40% since 2010 as foreign buyers have kept the country’s real estate market ticking over.

According to Spanish real estate valuation company TINSA, foreign investors have targeted coastal properties and city centre properties in 2014, helping to boost these markets by as much as 31% in the space of a year…

As a result, Spanish Realtors Association IPE has revealed that the number of empty, unsold properties in Spain will fall to as low as 563,000 in 2015 – the lowest figure for nearly seven years.

There are, however, stark regional differences across Spain’s various housing markets. While the percentage of property sales to foreign buyers is 30% so far across Spain as a whole, the IPE say that this figure rises to as high as 90% in some parts of the Costa del Sol.

“The purchase of non-residents continues to rise, growing at double-digit figures,” said IPE’s Director of the Real Estate Department, Jose Antonio Perez.

In places like Madrid, domestic demand has returned slowly this year, helping to ease the glut of unsold properties. IPE estimates that there will be only 12,000 unsold properties in the Spanish capital in 2015 – a fall of 80% on 2009 levels. Its report suggests that as many as 29,000 property transactions will occur in Madrid next year, buoyed by both domestic and foreign demand.

As Spain’s property prices begin to recover, international institutional investors have also been attracted to the market, which will help stabilise prices further and could trigger a spurt of construction in areas deemed to be suffering from supply shortages.

A lack of local financing via Spanish banks has also played into foreign investors’ hands, said the report, which estimates that as many as 70% of property transactions in Spain this year have been made mortgage-free.

The Costa del Sol’s own ‘Golden Triangle’ – the area comprising Marbella, Benahavís and Estepona – has enjoyed a strong 2014 in terms of property transactions. Estimates suggest that 70% of all property sales in this region have been to foreign investors, with British buyers making up the largest single market.

TINSA’s experts predict that Spain’s entire housing glut will be cleared as early as 2017, with the pace of new constructions set to gather speed in the latter half of next year.