Foreigners buying more in Spain

During the second quarter of 2012 the foreign market accounted for 9502 Spanish property purchases, which represents a 12 percent increase compared to the same period in 2011, and is the highest figure in the last 4 years when it stood at 11,130 property purchases.

However, even though the transactions made by this group have show strong growth over the last four consecutive quarters, it is still below is peek of near 30,000 property purchases registered in the second quarter of 2006. But this ‘artificially high’ figure can be explained due to the high level of large urbanizations that final reached completion and went to notary. You can appreciate how an urbanization of several hundred properties in a popular tourist resort suddenly going to title deeds might skewer the figures a bit.

Understandably the growth in the foreign market can be explained by the strengthening economies in Northern Europe and other parts of the world. Additionally it has been reported that an important factor in the rise of foreign purchases in due to the decline in the sales prices of residential property in Spain, which in the second quarter fell on average in Spain by 8.3% to an average of 1,604 euros a square meters, which brings the national figure back in line with the average prices of 2004.

In contrast to the highs recorded of 2008 before the bursting of the Spanish property bubble, statistics by the Ministry of Development, the sale of properties to foreign buyers dropped to record lows in the first quarter of 2009, when it fell to 5036 sales.

For location of housing, most purchases made in the second quarter were in Andalusia (1676), Valencia (3114), Catalonia (1615) and the Canaries(1173). Meanwhile, the lowest recorded number of operations in Cantabria (15), Ceuta and Melilla (16) and Extremadura (18).

In regards to which provinces saw the highest level of purchases, Alicante toped the chart with 2,645 sales, followed by Malaga (1127), Barcelona (847), Tenerife (655), Balearic Islands (536), Las Palmas (518) and Madrid (522). At the opposite end, there is Avila (2), Ceuta, (3) and Palencia (4).

In this context, direct foreign investment rose by 2.4% over the same period as the year before, to 1,163 million euros. According to the latest data from the Bank of Spain, this is the highest figure since the second quarter of 2011.

Andrew Belles

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