Two years after the pandemic, foreigners are buying homes in large numbers in Spain.
Foreigners bought 72,987 homes in the domestic market in the first half of this year, the highest figure in a historical series that began in 2007, according to data from the notary’s office. Moreover, these operations accounted for 20.3% of total registrations in the country as a whole, equalling the registrations recorded in the second half of 2015, the average price they paid for the properties has reached its maximum value.
The UK, Germany and France remain the most dominant nationalities, although the Netherlands, Norway and Ireland also played a prominent role in the first half of the year: they led the increase in the number of companies.
Home buyers in the Netherlands, Norway and Ireland more than doubled the number of completed home transactions between January and June compared to the first half of 2021, according to statistics from the General Council of Notaries. “For the third consecutive quarter, purchases by foreigners of all nationalities increased (52.75 on average), but more purchases were made by the Dutch (121.5%), Norwegians (119.5%) and Irish (106.7%),” details the notary.
Specifically, in the first half of this year, Dutch buyers purchased 3,641 homes in Spain: in addition to breaking records in the historical series, the Dutch have become the 7th most important nationality by volume of transactions.
Buyers from Ireland, on the other hand, made 1,395 transactions, the second highest figure since 2007 and only surpassed in the first half of that year. For Norwegian nationals, the number of home sales and purchases is lower: 979 home sales and purchases were completed, the highest number in four years.
In addition to doubling last year, the data show that demand for housing from Norwegian nationals has grown strongly over the past two years. In fact, searches for homes for sale in the Netherlands, Ireland and Norway have doubled since 2020.
The Netherlands has recorded almost 830,000 home searches so far in 2022, making it the fifth largest country after Germany, France, the UK and the US. Compared to last year, the increase is around 22%, and compared to 2020, the increase is 98.8%.
For Ireland, the figures reflect the same trend: so far this year, visits are up 32% year-on-year and 122% compared to Covid-19, to some 334,000 searches. Thus, searches from Norway increased by 18% compared to last year and by 111% compared to 2020, with around 131,400 visits.
Why are more and more homes being bought?
According to experts, the factors influencing this growth in demand are the promotion of teleworking, retirement, the good climate, good communication, the technological hub that Spain is consolidating, the relatively lower housing prices than other European countries and the energy crisis.
Now in Spain there are several very important technical centres for attracting talent: Barcelona has historically been one of them, and now Malaga is developing rapidly in that sense. Both cities attract people with high purchasing power.
The fact that “real estate investment is a safe and profitable investment” is also having an impact, which is why the business of foreign investors is growing.
In these countries, house prices have risen significantly in recent years, due to a housing shortage of around one million properties. For this reason, buyers are looking to Spain, where houses are much cheaper.
According to a Bloomberg study for the first quarter of this year, the Netherlands is one of the countries where house prices reached alarming levels, registering a real increase of almost 17%. In Ireland the rise also reached double digits (13.9%), while in Norway it stood at 8.1%. In Spain, on the other hand, the rise was 6.3%. The real estate consultancy Knight Frank also placed the Netherlands and Ireland among the countries in the world where average house prices rose the most between January and March.
This is shown by statistics from the EU’s Eurostat office. In the second quarter of the year, house prices rose by an average of 9.3% year-on-year in the eurozone and 9.9% in the European Union as a whole, while in the Netherlands the rise exceeded 18% and in Ireland 14%, compared to 8.1% in Spain.
Where do they look for housing and what type are they looking for?
Teleworking has brought about major changes in preferences at the user level. Buyers prioritise pleasant environments with a full range of services to develop their employment.
Coastal areas, including the Costa Blanca, are among the preferred areas for factors such as good weather and connectivity. And this year there is an additional element: the cost of energy in Northern European countries will be even higher than in Spain.
In terms of the type of property, there are all kinds of transactions: the purchase of a property for residence, as a second home and for investment. The most recurrent profile is that of a buyer between 45 and 60 years old who is looking for a flat in a historic centre, in a coastal area or a villa. The Dutch are among the biggest home buyers in the area, along with Germans, French, Belgians, Americans and Mexicans.
Buyers from these countries tend to opt for larger homes than those purchased by Spaniards, with larger spaces and adapted for long-term living.
Proof of this is the average price paid by these nationalities when buying homes in Spain. Norwegians were the third highest payers during the first half of the year (2,701 euros/m2, only surpassed by the Danes and Americans), while the Dutch (2,252 euros/m2) and Irish (2,092 euros/m2) were also above the total average for foreigners (2,062 euros/m2) and above the average paid by Spanish buyers (1,560 euros/m2).