Foreign buyers flocking back to Spain’s property market

Foreign buyers cannot resist Spain's abundant charms

The third quarter of 2012 saw an 18 per cent increase in the number of foreign buyers purchasing property in Spain when compared to the same period a year ago.

Statistics from Spain’s Public Works Ministry have revealed that 8,803 Spanish properties were bought by foreigners in the third quarter of the year, maintaining the upward trend of the past five quarters.

In fact, 2012 has been a watershed year for foreign investment in Spain, with every quarter enjoying strong figures – a 16.2 per cent increase on 2011’s first quarter, and a 15.3 per cent increase on the second. The signs are that the fourth and final quarter of 2012 will see the year finish strongly, too.

So what does this mean for the Costa del Sol? As Spain’s most popular region – among both holidaymakers and home hunters – the Costa del Sol is something of a trendsetter, and local experts have been claiming that the market has been in the ascendancy for the past few months.

Coupled with the Spanish government’s incentives for foreign investors (which includes residency permits for Russian and Chinese buyers if they purchase a property for at least €160,000), and a return of confidence among German, Scandinavian, British and French buyers, the situation for property in Spain is looking increasingly positive.

Spain’s economic woes continue to bedevil native Spaniards, however – domestic property sales transactions are down by 1.17 per cent on last year, and new home sales have fallen by 6.7 per cent in the past 12 months.

Property prices across many parts of Spain have fallen to reflect the economic difficulties facing millions of Spaniards. Official statistics show that property values are down by 9.5 per cent since 2011, and prices have broadly fallen back to levels not seen for almost a decade.

It’s a situation that has meant more affordability for foreign investors shielded from financial turmoil. British buyers no longer dominate the market like they used to, but are still a key player in the foreign investment market. As confidence returns and the pound continues to perform strongly against the euro, experts predict that 2013 could be a robust year for British buyers in Spain.