According to the latest data from the Bank of Spain, foreign investment in Spanish real estate reached 2,834 million euros in the first half of 2013, the largest amount in nine years, while Spanish spending on property outside of the country registered its lowest level in 10 years, at 199 million euros.
Compared with Spanish citizens’ loss of purchasing power and the difficulties of gaining access to credit, foreign appetite for assets located in Spain has been increasing over the last four years. All this in a context marked by the significant price adjustments registered and the real estate surplus.
The Bank of Spain reported that foreign direct investments in properties in Spain increased by 16% in the first half of the year compared with the same period of 2012. However, despite this amount being the highest since the economic crisis began, foreign spending on Spanish property still remains far from the figure reached in 2003, when in the first six months of the year it exceeded 3,500 million euros, 20% more than at present.
In contrast to the level of foreign investment in property in Spain, Spanish investment in property abroad has fallen significantly since the boom years of the real estate sector when, in the first half of 2007, it exceeded 1,800 million euros. In fact, up until June of this year Spanish spending on property abroad is 12% lower than in the first six months of 2012, and 89% less when compared with the maximum reached in the same period of 2007.
According to a recent study by the global property consultancy, Knight Frank, such is the attraction of Spain that international funds are ready to invest 14,000 million euros in the Spanish real estate sector in 2014.
Furthermore, according to statistics compiled by the General Council of Notaries, the number of home purchases made by foreigners in Spain during the first six months of the year grew by 13.6% compared with the same period of 2012, reaching 24,552 transactions.
The Notaries reported that non-resident citizens accounted for the majority of the transactions, with the most being registered by the Belgians, with an increase in transactions of 78.1%, the French, with 70% more, and the Germans, with 35.3% more.
El Mundo reported that, although it is still the non-resident British citizens who buy most homes, with an increase of 24.6% to 1,244 operations in the quarter, the level of acquisitions of this group have continued to register a gradual decline.
Home purchases made by other nationalities have also reduced, with transactions by Ecuadorians and Colombians falling by 34.5% and 27.7%, respectively, and those of the Romanians falling by 1.1%. And, according to the latest study released by the Sociedad de Tasación, house values have plummeted 47.7% since their maximums registered in the boom years and now stand at an average of 1,253 euros per square metre.
At the end of the first half of 2013, Spanish families spent 32% of their annual gross income available on buying a home, employing an average of 5.7 years. To purchase a property of about 90 square metres (the basis on which the Bank of Spain prepares its calculations), families required 5.8 years in the first quarter of 2013, and 5.7 years in the second.