2023 was the year foreigners fell for housing in Spain.

The real estate market ends in 2023 with record figures for foreign home buyers despite the uncertainty and interest rate hikes. According to data from the Spanish General Council of Notaries, foreigners made up 21.4% of all purchases in Spain between January and June, their greatest weight since records began. Although the latest data is from the first six months of 2023, figures show a very positive year. Brits (9.6%) once again led the transactions, ahead of Germans (8.1%) and Moroccans (7.3%).

Between January and June, 67,983 properties were sold to foreigners, the third-best figure in the historical series of the notaries' statistics. Of the almost 68,000 home sales made by foreigners during this period, 56.8% were made by resident foreigners, representing a 3.4% year-on-year drop. The decline among non-resident foreigners was higher, reaching 12.4%.

Where do people buy more homes, and for how much?

Foreigners are most attracted to coastal regions. Valencia had record highs, selling 20,933 homes to foreigners. Andalusia followed with 12,656 homes, Catalonia with 10,350 homes, the Canary Islands with 5,640 properties, and Madrid with 4,651 properties. 

On average, transactions by foreign buyers in the first half of 2023 closed at €2,095/m2, an increase of 1.3% compared to the same period last year and the highest figure since the end of 2008, surpassing the average price paid by Spanish nationals (€1,574/m2).

Non-resident foreigners again paid more for their homes (€2,598/m2), the highest figure recorded by the General Council of Notaries, and ahead of resident foreigners (€1,676/m2) and nationals (€1,574/m2). But it is residents (2.9%) who have seen prices rise the most, ahead of non-residents (2.8%) and Spanish nationals (0.7%).

Swedes, Danes and Americans, buy the most expensive homes.

By nationality, the highest prices per square meter were paid by buyers from Sweden (€3,036/m2) and Denmark (€2,930/m2), both reaching an all-time high, followed by buyers from the USA (€2,921/m2), Switzerland (€2,812/m2), Germany (€2,724/m2) and Norway (€2,584/m2). All of them, except the Norwegians, recorded during the first half of 2023 some of the three highest prices in the historical series of notaries (which began in 2007) for their nationality.

Still above the national average, buyers from Russia (€2,293/m2), France (€2,260/m2), Italy (€2,219/m2), the Netherlands (€2,195/m2), Belgium (€2,180/m2), which reaches a record high, and Ireland (€2,125/m2) are also above the national average. The average amount paid by citizens of other non-EU countries (€2,320/m2) is also at its highest in the first half of 2023.

On the other hand, Moroccans (€689/m2), Romanians (€1,086/m2) and Ecuadorians (€1,335/m2) are the nationalities that have bought homes at the lowest prices.

Which nationalities buy the most homes?

In these first six months of 2023, Brits were the foreigners who bought the most homes, with 9.6% of total transactions, followed by Germans (8.1%) and Moroccans (7.3%). That translates into 6,498 units, 5,519 units, and 4,931 units, respectively, ahead of the French (4,926) and Romanians (4,336).

For the first time in two years, sales made by foreigners of all nationalities decreased year-on-year, with falls in important nationalities such as those from Germany (-26.8%), the United Kingdom (-17.1%), Romania (-13.8%), France (-13%) and Morocco (-8.9%). However, Russians (50.2%), Ukrainians (41.6%) and Americans (13.6%), Chinese (11.8%), even other non-EU nationals (8%) have had a positive evolution.

Some of these nationalities had never bought so many houses in Spain in these six-month periods analysed by the notaries. Americans registered 1,339 sales and purchases, doubling the figures for the first six months of 2021. And since the worst of the pandemic passed, American interest has not stopped growing.

Foreigners' most sought-after home

For real estate companies, foreign buyers already account for 22% of total sales transactions, which represents a 2% year-on-year increase in the country, according to data from Unión de Créditos Inmobiliarios (UCI) and the Spanish International Realty Alliance (SIRA).

When asked about the most requested type of real estate by foreigners, estate agents confirmed that the most popular were flats (60%), followed by apartments or studios (21%) and single-family homes (19%).

Most foreign buyers (68%) purchased a first residence, followed by a second home (21%) and to a lesser extent (11%) as a rental investment.

The results also highlight which aspects foreign clients value most highly, the first being proximity to services (28%), proximity to green spaces (25%) or proximity to coastal areas (18%). To a lesser extent, they prefer being close to an airport (3%), that it is a new property (10%) or that it has a good energy rating (5%)

Which foreigners request more mortgages in Spain?

The new non-resident mortgagee profile in Spain shows that buyers are increasingly younger due to the drive for remote work and come mainly from the United Kingdom, Germany, France or Belgium, although US homebuyers "have made a strong entrance", according to an analysis by Unión de Créditos Inmobiliarios (UCI).

The traditional buyer profile has therefore changed, which was once 50–60 years old, married with children, with a high level of education and an income of more than €60,000. Now, on the other hand, younger buyers who are digital nomads are making headway.

In the case of mortgages, only 30% of foreigners need bank financing to buy a house, according to the UCI and SIRA Barometer.

And by nationality, Germans recorded the most mortgage applications, ousting the British to second place, according to the latest hipotecas report for the year's third quarter. Therefore, German citizens accounted for 13.1% of mortgage applications to buy a home, being the most prominent weight of the ranking. The British, historically the most common homebuyers in Spain, have been relegated to second place, 12.9% of all applications received by the mortgage brokers.

French nationals have also gained prominence in recent months, recovering third place after a year and a half, gaining ground on American and Swiss, which had taken turns in that position since then and now accounts for 11.2% of applications.

According to data, other nationalities accounted for less than 10% of mortgage applications to buy a home in Spain. The USA is fourth on the list, with 9.8% of the total, followed by Switzerland (7.5%), Ireland (7%), the Netherlands (6.1%), Belgium (4.9%), Sweden (3.6%) and Italy (2.6%). These ten countries accounted for almost 80% of all mortgage applications by foreign nationals during the third quarter.

Foreigners' favourite Spanish towns to buy or rent

Foreign buyers' interest in finding a home in Spain is evident, even in towns of less than 5,000 inhabitants. Besides towns in areas traditionally attractive to foreign tourists, there are other towns in less obvious regions, including one in Asturias. All places in the study have a common feature: they are coastal towns or just a few kilometres from the sea.

According to a study, the real estate marketplace in southern Europe, analysing the number of visits received in its database during June and July, Benitachell (Alicante) received the highest volume of searches for housing from abroad. The following three places went to towns in the Girona area: Begur, Pals and Llançà. Arenales del Sol (Alicante) complete the top five.

Next, we find the Malaga towns of Frigiliana and Competa before the Mallorcan Ses Salines. In ninth position is Ponga in Asturias, followed by Alcossebre (Castellon), Els Poblets and El Verger (both in Alicante), Cala d'Or (Balearic Islands), Busot and Algorfa (also in Alicante).

The last five positions of this top 20 towns are completed with Sencelles (Balearic Islands), Ojén (Malaga), Formentera del Segura (Alicante), L'Ampolla (Tarragona) and San Juan de los Terreros (Almeria).

Foreigners' interest in renting houses, especially on the coast, is growing.

Interest in renting a property from abroad soared in 2022 and is growing in 2023. At the close of the second quarter of this year, a rise of close to 85% in the number of visits to the rental offer compared to the same period of 2019 was confirmed and already represents 12.5% of the total, better than before the pandemic. Focusing on the Spanish coast, foreign interest in renting a house exceeds 20% in the provinces of the Balearic Islands, Alicante, Malaga, and Santa Cruz de Tenerife.

Foreigners are interested in buying property in Spain, even in small towns. Many also decide to rent in Spain and take the first step from their home country. According to a study conducted by data, analysing the visits received to the real estate marketplace during June, 12.5% of the total were made from other countries.

The Balearic Islands (26%), Alicante (25.2%), Malaga (22.8%) and Santa Cruz de Tenerife (21.4%) are the most attractive regions for foreigners looking to rent, with the highest number of visits from abroad in their market, ahead of Valencia (17.3%), Barcelona (17.2%) and Las Palmas (16.9%). Girona (14.5%) and Almeria (14.3%) are also above the national average.