Number of British buyers in Spain increases despite Brexit looming

Prime property sales in Spain increased by 27% year on year across all regions in the first half of 2018 with sales to British buyers increasing in popular resort locations despite Brexit.

The latest market report from Spanish firm Lucas Fox shows that key second home destinations such as Marbella, the Costa Brava and Ibiza all saw significant growth compared to the same period last year.

International buyers dominated sales in these coastal regions with 87% to foreign buyers compared to 63% in the first six months of last year with the majority coming from the UK, France and Scandinavia. The main motivation for purchase was as a secondary residence at 77%.

So far it has been a record breaking year for the Costa Brava, according to Lucas Fox partner Tom Maidment. ‘The volume of sales so far in 2018 has already exceeded our forecast for the whole year. Properties above €1.5 million and new homes are selling particularly well,’ he said.

Northern European buyers have been the most active with French and British buyers accounting for over 50% of all Lucas Fox sales transactions in the region. ‘We are currently looking at a number of high-end projects in the area as demand for turnkey homes, particularly from foreign buyers, grows year by year,’ Maidment added.

In the first six months of 2018 Lucas Fox Ibiza enjoyed one of its most successful periods in recent years, mainly due to the high volume of prime sales, all of which were to international buyers purchasing secondary residences.

In Marbella Lucas Fox sales increased by 50% and the average sales price went up to just over €1.2 million. Foreign buyers accounted for 83% of sales and, as with Ibiza, all bought second homes.

In the cities of Madrid and Valencia sales were up by 20% and 10% respectively but there was a slight dip in sales in Barcelona which the firm suggests was due to the political issues in Catalonia. However, offers received for new homes in the first six months of 2018 more than doubled compared to those received in the first six months of 2017.

‘The knock-on effect of the political situation in Spain meant we saw a temporary drop in demand for homes from international buyers. The situation has now stabilised and we are now registering as many enquiries for Barcelona property as we were this time last year,’ explained Rod Jamieson, Lucas Fox’s managing director.

He pointed out that sales involving local buyers have remained constant throughout the period. Prices in the city have also readjusted in the last six months or so and buyers are seeing this as an opportunity in which to invest, given the positive forecasts of continued price rises and new homes continue to be in high demand particularly in central districts and along the beachfront.

It has also been a good half year for the Barcelona lettings department with rentals increasing by nearly 17% as the Catalan capital becomes increasingly popular among the start-up generation and tech savvy entrepreneurs.

Sales to British buyers increased to 13% of all sales, an increase of 23% year on year. In resort areas, British buyers represented the biggest buyer group in Marbella at 33%, some 27% in Sitges 27%, 25% on the Costa Brava 25% and 13% in Ibiza.

‘The figures suggest that investors with more to spend are shifting money from the UK and acquiring European assets in anticipation of events to come when Brexit takes full effect. Buyer nationality in city locations continues to be more varied,’ the Lucas Fox report says.

At the same time, data from property portal Idealista shows that prices at the end of the second quarter of 2018 rose by 23% in Madrid, by 15% in Valencia, by 3% in Barcelona, by 2% in Girona Province, by 12% in Málaga and by 2% in the Balearics, compared to the price at the end of second quarter of 2017. In Spain as a whole, prices rose by 7%.

Meanwhile latest data from the Spanish Association of Notaries shows that the housing market grew by 7.7% to May 2018, the fifth year of growth since the start of the real estate recovery midway through 2014. The Notaries data also showed that mortgage lending was up 9%.