Spanish property market continues to grow

For those considering property investment in Spain, recent figures provide compelling evidence of the decision being a lucrative one. In the second quarter of 2023, nationwide property prices surged by an impressive 3.6% compared to the same period in the previous year, following a healthy 3.5% year-on-year boost in the first quarter.
This sustained growth marks nearly a decade of continuous upward trajectory, firmly establishing Spain as an attractive destination for real estate investment.
A significant driver of this surge has been the proliferation of new-build homes, particularly prominent in regions such as the Costa del Sol and Costa Blanca. Investors who purchased new-build properties in the preceding year have already reaped the rewards, with average prices soaring by 7% year-on-year in the second quarter of 2023.
Foreign buyers have shown keen interest in these investment opportunities, with only a marginal 2.7% reduction in home purchases during the first quarter of 2023 compared to the previous year. This resiliency in demand is notable considering the steep interest rate hikes earlier in the year, alongside the escalating cost of living and inflation issues plaguing Spain’s crucial foreign buyer markets in the UK and Germany.
In particular, the decline in purchases by foreigners was limited to just 2.7% year-on-year in Q1 2023, a striking contrast to the steeper declines among Spanish buyers, which saw a 9% drop in second-home purchases and a 12% reduction in first-home acquisitions.
This steadfast demand from foreign buyers builds on the robust rebound observed in 2022, when their acquisitions surged by an impressive 30.7%, compared to the 6.4% growth recorded for overall home sales.
Consequently, foreign buyers now constitute a significantly larger proportion of total sales, accounting for 19.5% according to the Ministry of Transport, Mobility, and Urban Agenda. This trend is partly attributed to the fact that foreign buyers are less reliant on credit when making property purchases.
The property market in Spain continues to exhibit remarkable resilience and attractiveness, as evidenced by the sustained upward trajectory in prices. This, coupled with a continued interest from foreign investors, indicates a robust and promising outlook for real estate in Spain.