The General Council of Notaires reports that foreign buyers scooped up 23% more properties than they did during the same time last year. Many real estate experts note that Spain’s Department of Housing reports a fraction of this activity because it uses different criteria, which belies how strongly foreign purchases are driving the country’s real estate market. Notaries expect foreign sales to increase further in the fourth quarter thanks in part to a introduction of a visa program that grants residency to non-European Nationals who invest a minimum of €500,000 in Spanish property. For more on this continue reading the following article from Property Wire.
International buyers are buying more properties in Spain with non residents the driving force behind the increase in foreign demand, according to data from the General Council of Notaires.
Foreigners bought 14,593 homes in Spain in the second quarter of 2013, up 23% compared to the same time last year, the figures based on deeds witnessed by notaries show.
People not living in Spain bought 43% homes in than the same period last year, whilst foreigners resident in Spain only bought 4% more, the data also shows.
But Mark Stucklin of Spanish Property Insight points out that this flatly contradicts the data from the Department of Housing, which say that non-residents are just a small part of foreign demand.
It underlines why so called official data from the Spanish government can be misleading.‘The government figures say that the vast majority of foreigners who buy property in Spain are also living there as residents, which anyone in the property business knows is plainly untrue,’ explained Stucklin.
‘Talk to any agent selling Spanish property to foreign buyers and they will tell you that most of their clients are non-resident, to the tune of 80% in many cases. It looks to me like the Housing Department’s figures are way off target, which is bad news as how are they going to formulate a sensible policy on such an important question as foreigners buying property in Spain which is vital to the economy, if they don’t know what’s really going on?’ he said.
According to the government statistics, just 1,086 non-resident foreigners bought property in Spain in the second quarter of 2013, a far cry from the almost 5,000 who bought in the same period of 2006. ‘I don’t doubt for a second that the number of foreign buyers is down from the peak, but I do doubt the official breakdown between resident and non-resident buyers,’ added Stucklin.
He said he cannot work out why the Housing Department figures are so different as they use the figures from the notaries. One reason could be that the registrars only include non-residents in their figures, whilst the notaries include both and the registrars count properties sold, whilst the notaries count buyers.
‘So if a British couple living in Alicante, and classified as resident, buy a home there, the notaries count that as two foreign (resident) buyers, whilst the registrars wouldn’t count them as foreign buyers at all,’ he added.
The figures from the Notaires show that currently Belgian non-residents second home buyers with the number buying up 78%, the number of French buyers has increased by 70%, the Germans by 35% and British buyers are up 25%.
When it comes to demand from foreign residents the number of Belgians have gone up by 42%, followed by Moroccans with an increase of 40%, Russians are up 21%, French up 8% and Germans up 5%.
Although British demand increased in the second quarter of the year, the British market share continues to decline, down to 15% compared with 39% in the fourth quarter of 2007. But the British are still the biggest group of buyers, followed by the French at 11%, Russians at 9%, and Germans and Belgians both at 8%.
Foreign sales increased the most in Murcia, up 43%, followed by Andalucia with an increase of 37% and the Valencian Community with an increase of 32%.
Sales to overseas buyers are expected to increase even more in the fourth quarter of this year thanks to the introduction of the so called golden visa that grants residency to non European Union nationals if they spend a minimum of €500,000 on property.
According to Marc Pritchard, sales and marketing director for Spanish house builder Taylor Wimpey Espana, the golden is likely to appeal buyers from Russia, China the Middle and Far East who are keen to access the EU and enjoy visa free travel in the 26 country Schengen Zone.
He points out that although the minimum investment level is €500,000 this doesn't have to be in just one property, it is accumulative and can be made up by investing in one or more properties.
‘We have already seen a staggering 2,500% increase in Middle Eastern buyers so far this year compared with the same period in 2012 and a 190% increase in buyers from Russia and Lithuania in the same timescale,’ he said.
‘The final quarter of this year is set to be great in terms of sales, surpassing the levels previous to the economic crisis with sustained growth of international visitors and second home buyers not just picking up a Spanish visa but bringing with them the power to propel national market recovery,’ he added.
This article was republished with permission from Property Wire.