Foreign buyers are driving increased property sales in Spain, especially on the coast
The recovery of the international property market during the first quarter of 2022 has exceeded the rates of growth for recent years, with the British and Dutch leading the way.
The fact that Spain is an attractive holiday destination for foreigners is no surprise. However, as our Residential Property Market Analysis for Jávea shows, Spain has also become a key international market that has managed to regain confidence following the pandemic.
According to the General Council of Spanish Notaries, the Valencian Community (40%, with the province of Alicante leading the way), the Canary Islands (48%), the Balearic Islands (32.7%) and Andalusia (53%) are all at the top of the list of preferred destinations for foreign buyers.
During 2021 alone, over 95,492 sales were completed, representing an increase of almost 40%. With rates continuing to rise by 19.2% during the first quarter of 2022, foreign buyers are playing a key role as they are increasingly drawn to Spain, particularly its islands and coasts.
There is a wide variety of nationalities that make up this market segment. Firstly, there are buyers from countries like Denmark, Sweden, Germany and Switzerland, where property prices are very high, exceeding €2,500/m2.
Then, there is a second group of buyers coming from countries like France, Belgium and the United Kingdom. British buyers are a particularly important group, especially in Alicante, where they have accounted for 3,423 sales – 16% of the total. Behind them are the Dutch with 2,352 transactions representing 8.2% of the total.
Finally, there is a third group of resident foreign workers who are investing in their first properties, mostly coming from Romania, Morocco and Algeria. For this group, property transactions tend to relate to communal properties in cities with prices below €1,000/m2.
1. Buyer profiles: foreign residents and non-residents
As we can see, there is a clear difference between those foreign nationals who live in Spain permanently and those that visit only part of the year. This means that the way that the property market will evolve depends not so much on nationality as on residency.
What is particularly striking is that, following the pandemic, it has been non-residents who have played a leading role, accounting for some 40% of sales – a historic record. This is due to the fact that these buyers see Spain as a good investment opportunity.
2. The province of Alicante, the most popular destination for foreign buyers
By the end of 2021, Alicante accounted for 20% of all property sales to foreign buyers in all of Spain. The entire province has seen impressive growth in the sector, especially Altea (98%), Teulada (103%) and Jávea (73%). Jávea in particular has been one of the most popular places for some nationalities, such as the British, who in the last three years have accounted for 487 transactions totalling almost €68 million.
3. Jávea, a jewel on the Costa Blanca for the international market
In the last few decades, the population of Jávea has evolved to the point that almost 60% of residents are foreign and, as a result, there has been a dramatic rise in property prices. According to the Spanish Notarial Certification Agency, property prices have increased by almost 50% since 2015. This is not something that has happened in all towns in Alicante.
If we analyse the last few years, we see that, as well as the British, the Dutch have also contributed significantly to this development, doubling their figures for 2020 and exceeding those for 2019. And if we look closer, we can see that Jávea is the leading location for the whole province for the number of property purchases by Dutch buyers, with a total of 176 in 2021. This Alicante town has always been a particularly popular place for the Dutch.
If we compare sales volumes in Jávea with other towns in the province, we see that the area of La Vega Baja del Segura is particularly important. This area includes towns such as Orihuela (683 sales in 2021), Torrevieja (322), Rojales (279), San Fulgencio (164), Pilar de la Horadada (136) and Algorfa (113).
Furthermore, if we look at average prices, we see that it is the area of Marina Baja that most stands out, with Jávea (€406,663), Teulada (€371,298), Altea (€307,886) and Denia (€252,303) at the top of the list.
And lastly, if we consider the total volume of sales to British buyers, we find Orihuela at the top with almost €100m in sales, Jávea with €68m, and Rojales with €44m.