The average price per square meter reached 2,095 euros in the first half of 2023, but Swedes and Danes are willing to pay much more than this, while Moroccans, Romanians and Ecuadorians buy the cheapest houses.
The demand for real estate in Spain continues to surge among foreign buyers, leading to a notable increase in the average price per square meter for properties in the country during the first half of 2023. According to the latest report from the General Council of Notaries, the average price per square meter reached 2,095 euros/m² during this period, marking a 1.3% increase compared to the same period in 2022. Foreign home buyers, in particular, are willing to pay a premium for their dream properties in Spain.
Swedes, Danes, and Americans top the list of those willing to pay the highest price per square meter to become property owners in Spain, with their investments reaching 3,036 euros/m², 2,930 euros/m², and 2,921 euros/m², respectively. Notably, Swiss (2,812 euros/m²), Germans (2,724 euros/m²), and Norwegians (2,584 euros/m²) also exceeded the average price per square meter, demonstrating the increasing demand among European investors.
Conversely, the most budget-conscious property buyers in Spain include Moroccans (689/m²), Romanians (1,086/m²), and Ecuadorians (1,335/m²), who secured their homes at relatively lower price per square meter.
This study also highlights the shifting dynamics in real estate investments from one year to the next. Russians led the increase in budget, paying 15.2% more for their homes compared to the previous year. Swedes and Ecuadorians also showed strong budget growth, with an 11.9% and 11.0% increase, respectively.
In contrast, the amount paid by Norwegian buyers decreased by 4.3%, while the Netherlands saw a decrease of 2.7%. Romania (-1.1%), Morocco (-0.6%), and Portugal (-0.5%) also recorded slight reductions in the price per square meter.
Foreigners paid higher price per square meter when compared to residents
Foreign home buyers, whether residents or non-residents, consistently paid higher price per square meter in Spain. Non-resident foreigners, in particular, spent an average of 1,676 euros/m², while national buyers paid 1,574 euros/m², showing the strong allure of the Spanish property market for international investors. This data indicates an increase of 2.8% for resident buyers compared to the previous year and 0.7% for national buyers.
When examining the preferences of foreign home buyers, the report underscores the significant role played by different nationalities in various Spanish regions. For instance, the French led the share of sales among non-resident foreigners in several regions, such as Aragon, Castilla y León, Catalonia, Extremadura, Galicia, Navarra, and the Basque Country.
Meanwhile, Germans dominated the Balearic Islands and the Canary Islands. In Cantabria, Americans were tied with Germans. Cantabria also had the highest number of home purchases by Americans, while the latter held leadership in Castilla la Mancha and La Rioja. American investors are increasingly attracted to Spain due to factors such as the climate, leisure opportunities, and favorable currency exchange rates.
The British were the primary buyers in Andalusia and Murcia, whereas Asturias, the Valencian Community, Madrid, and Galicia saw a substantial number of purchases by Argentinians, Belgians, Chinese, and Portuguese buyers, respectively.
Resident foreigners, particularly Moroccans and Romanians, dominated property purchases across the country, with the exceptions of Galicia and the archipelagos, where Portuguese, Germans, and Italians held a higher share.
In the context of regional variation, property prices increased in fourteen autonomous communities and decreased in the remaining four. Notable increases occurred in Extremadura (12.3%), Cantabria (11.1%), and Murcia (10.2%). On the other hand, price decreases were observed in Aragón (-7.4%) and Navarra (-2.6%).
Despite the market fluctuations, home sales conducted by foreigners during the first half of the year accounted for 67,983 transactions, reflecting a 7.5% annual decrease. While this decline represents the first drop in two years, foreign buyers now constitute 21.4% of all property transactions, emphasizing their significant role in the Spanish property market. Among these buyers, British nationals led with 9.6% of the total transactions, followed by Germans (8.1%) and Moroccans (7.3%). Other non-EU nationals collectively represented 12.8% of foreign property buyers.
A separate report from UCI and Sira revealed the housing preferences and payment methods of foreign buyers. For the type of housing most in demand, apartments topped the list, comprising 60% of sought-after properties. Apartments or studios accounted for 21%, while single-family homes made up the remaining 19%.
Regarding the purpose of the purchase, 68% of buyers intended to reside in the home full-time, while 21% purchased properties as second homes. Only 11% considered their purchase as an investment for rental.
“Luckily for the sector, the main attractions of our country remain, and we hope that they continue to attract buyers of different nationalities, who are increasingly arriving from countries with the intention of residing permanently in Spain,” commented José Manuel Fernández, deputy director of UCI, in the report.
Proximity to services (28%) and quiet areas with green spaces (25%) were the most valued aspects of the homes, followed by proximity to the coast (18%) or communities with residents of the same nationality (10%). Less significant factors included proximity to an airport (3%), new properties (10%), or those with good energy ratings (5%).
Regarding financing, the study confirmed that most foreign buyers in Spain did not require a mortgage for their purchase. Only 31% of buyers sought bank financing, primarily from national financial entities (33%) or institutions in their home countries (21%). A smaller number sought assistance from brokers in Spain or their home countries (29%) or from real estate agencies themselves (17%).
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