Staff Reporter
THE Spanish property market had an excellent first half (H1) of 2024 with the second-highest sales level in more than 15 years, up 6% on the same period last year to 350,818 transactions, according to the notaries.
The only time sales were higher was in the first half of 2022, when pent-up demand from 2020 and 2021 fueled a post-pandemic boom.
The second quarter (Q2) figure was even better, with sales up 10% to 189,909 suggesting the trend is turning increasingly positive as the year progresses.
With these figures in hand it’s fair to say that the market is one of the most buoyant in Europe.
Sales by region
By regions of greatest interest to foreign investors sales were up the most in Madrid (H1 +10%, Q2 +16%) with most regions showing a similar pattern of accelerating growth in the second quarter.
Only the islands showed negative growth in H1, with transactions falling the most in the Balearics (-9%), and by -3% in the Canaries.
But even in the Balearics the second quarter sales trend showed a slight improvement compare to H1
What factors are driving the strong sales?
The key drivers are a growing population, a change in interest rates, now falling, and a shortage of homes for rent as government interference in the rental market reduces the quantity and quality of homes for rent in hot markets like Madrid, Malaga city and Barcelona.
Spanish house prices are also on the rise. According to the notaries, prices in terms of €/sqm rose by 5% in H1, and 3% in Q2. Rising prices give buyers confidence that they are making a sound investment, and encourage them to buy before prices rise even further.
Sales involving foreign buyers
What about foreign buyers, who have been so active the last few years?
Data from the land registrars based on deeds inscribed in the first half shows foreign demand down 6% in H1, and 4% in Q2, in both cases the third best period for foreign sales on record. So foreign demand is down from a recent peak, but still high by historical standards.
By country the biggest increases in H1 came from Poland (+9%), Ireland (+8%) and the Netherlands (+5%), but in Q2 the biggest increase came from the USA (+21%).
However, most countries sent fewer buyers to Spain in the first half. The big three markets of the UK, Germany and France were all down in H1, by 10%, 12%, and 24% respectively (Q2 was generally a bit better), whilst the Russian decline was 27%, no doubt related to that country’s isolation since Putin invaded Ukraine.
What’s driving foreign demand? The data suggests that house prices at home are one important factor that appear to be positively correlated with the number of buyers heading to Spain. House prices are declining in the UK, Germany and France, whilst increasing in Poland, Ireland, and the Netherlands (Source:Eurostat / Gov.co.uk).
Mark Stucklin runs Spanish Property Insight, a property information website, and was author of the Spanish Property Doctor column in The Sunday Times (2005-2008), and the book ‘Need to Know: Buying Property in Spain’ published by Collins. (Buy from Amazon)
Read more information and advice about all aspects of the property market in Spain at https://www.spanishpropertyinsight.com
