Foreign buyers boosting sales of property in Spain

Last year the Balearic Islands topped the charts for property sales over one million Euros to foreign buyers and the trend continued into the first quarter of 2013, the latest data shows. In 2012 some 729 sales were made to foreigners, with an average price of €1,080,361, compared with just 41 in Madrid averaging €584,433.

According to statistics from Spain’s General Council of Public Notaries, British, Russian, Swiss and Scandinavian buyers were the major foreign nationality players in the Spanish property market in 2012 and continue to be for the first half of 2013. The Germans have slipped down the rankings but still feature strongly amongst the top buyer nationalities in the Balearics while in other parts of Spain there has been an increase in the number of British buyers.

‘The Balearics simply tick all the boxes luxury house hunters require such as security, privacy, good airline connectivity, excellent leisure facilities and infrastructure, alongside a restful ambience for a wind down getaway,’ said Daniel Chavarria Waschke, managing director of Balearics Sotheby’s International Realty which has offices in Mallorca and Ibiza. The statistics, which are just out, show how the market has evolved since the onset of the recession in 2007. The Balearic Islands, Gerona and Málaga have been the areas to capitalise most on foreign purchasers achieving increased transaction levels at the highest average prices.

Quote from PropertyForum.com : “If there is one country which epitomises the ongoing problems within Europe it has to be Spain with record unemployment, property prices in freefall, banks looking to offload their unwanted properties at any price and a future which at best looks difficult.”

Meanwhile, in Murcia estate agents Mercers had predicted at the start of the year that sales would increase by 25% in 2013 compared to the previous year. Now halfway through the year the firm reports that sales are already up 70% over the first six months of 2012. ‘We’ve sold in excess of 20 more properties in the first half of 2013 than we did in the same period last year, up 70%, and our feeling is that the market is set to accelerate further as the year progresses,’ said director Chris Mercer.

‘There is definitely a more positive vibe coming from the UK and this will translate to a larger percentage of British buyers for us as we move into autumn. Bank lending is still virtually nonexistent, but ironically that’s helping us as prospective buyers know they have to raise funds in their home nation and this saves a lot of time, weeds out the dreamers and leaves us with serious clients with finance already in place,’ he explained.

Mercers has also found that the average sale price had increased over 2012. ‘Last year our average sale price was €84,884. So far for 2013 it’s at €92,331. I had thought that this particular figure would be more or less the same as 2012, but instead we have a not insignificant increase of almost 9%,’ said Mercer. ‘I find this very encouraging as it suggests that the fire sales have passed through the system. Many of the developers who were selling stock with 100% finance have now done so, leaving established agents such as Mercers to continue what we do best and that’s sell great value property to traditional buyers,’ he added.

The British have bounced back and are now top of the nationality chart for Mercers’ buyers in the first half of 2013. The split is 60% British, 11% French, 11% Dutch, 8% Spanish, a sizeable figure showing that there is money in Spain, to be spent on good value property, 6% Swedish, and then mixture of Belgian, Swiss and German. Mercers expect that the number of British buyers will exceed 60% as the year progresses.