Property purchases by foreign residents in Spain stall
This follows efforts by the Spanish government in the last year to rebalance the property market in favour of locals amid skyrocketing prices, although the focus has been primarily on limiting non-resident foreigners.
Resident foreigners make up a bigger proportion of foreign buyers than non-resident foreigners (58 percent in Q1 2024, according to Spain's General Council of Notaries), hence why the recent slowdown in purchases by this group is likely to be welcomed by Spanish authorities.
The total value of property sales by foreigners residing in Spain reached almost €11.7 billion in 2024, representing a modest increase of just 0.4 percent compared to the same period the year before, according to the latest Housing and Land Observatory report published by the Ministry of Housing and Urban Agenda.
The majority of purchases made by foreigners resident in Spain last year were for second-hand properties. Of the €11.6 billion total spent in transactions in 2024, more than 90 percent were spent on pre-owned homes.
The purchase of second-hand housing was predominant among those from France (87 percent bought pre-owned homes), Morocco (85.9 percent), Romania (85 percent), Argentina (85 percent), Ireland (83.9 percent) and Italy (83.5 percent).
The largest share of purchases of new homes by foreigners were made by Belgian, Polish, Dutch and Swedish buyers.
The figures indicate a short-term stagnation in the market, as the total spend remained virtually unchanged from 2023 and remains below the more than €14.5 billion recorded in 2018.
But the purchase of homes by foreigners overall (resident and non-resident) still accounted for 19.1 percent of total transactions in 2024, standing at 122,118 units, 988 fewer than the previous year, government data shows.
That means that almost 1 in 5 property purchases in Spain were carried out by foreigners, still a high figure but one that didn't increase in 2024.
By origin, buyers from the UK accounted for 8.6 percent of the total, followed by those from Germany (6.7 percent), Morocco (5.7 percent) and France (5.4 percent).
This stagnation comes amid attempts by the Spanish government to better regulate the housing market. The Socialist government of Pedro Sánchez recently ruffled feathers when it proposed slapping a 100 percent tax on property purchases by buyers who don't reside in Spain or the EU.
This would essentially double the price for people who don't live in the EU and want to buy a second home in Spain.
Even more radical was the proposal submitted by Catalan separatist party ERC to require actual foreign residents to apply for a permit to buy a Spanish property if they haven't become permanent residents yet. In other words, if they are temporary residents haven't officially resided in Spain for five years.
This proposal was rejected by Spain's Congressional Housing Committee in late April, but now ERC are trying to get such a law passed only in Catalonia.
If there are already questions about whether limiting non-residents from buying homes in Spain contravenes EU laws, it is even more likely that Brussels will not let Spanish national or regional authorities prevent foreign residents from buying, no matter whether they continue to buy Spanish homes in high numbers.
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