Brits lead demand for spanish homes, as weak euro attracts investors

Photo: rbrands

British buyers are leading a surge in demand for Spanish homes, as the pound enjoys a strong period against the euro. Indeed, Sterling hit a seven-year high against the single currency last week, boosting the spending power of Brits in popular areas such as the Costa Brava.

13.01 per cent of all home purchases in 2014 were made by foreigners, according to the College of Registrars, an increase from 11.15 per cent in 2013. Brits were the biggest buyers, making up 16.72 per cent of foreign sales, followed by the French (10.27 per cent) and Russians (7.47 per cent).

Favourable currency rates are attracting overseas investors from other countries too. Indeed, estage agency Lucas Fox forecasts the international financial markets to be a key driver in the uptake of Spanish prime residential property this year.

In Barcelona, prices have stabilised in the past 12 months, and new international interest is impacting on demand for prime residential property.  Lucas Fox saw Middle Eastern buyers account for 12.5 per cent of all purchases during 2014, followed by the Spanish and French (both 11 per cent), the Germans (8 per cent) and the British (7 per cent).

The number of transactions in 2014 increased over 2013, with more properties above €1 million selling than in the previous year.

"We see 2015 as the recovery year for the Spanish prime residential property market," says the agency's co-founder, Alexaner Vaughan, "driven mainly by increasing numbers of overseas buyers. We expect that those who were deterred by falling prices during the past 7 years or so, will enter the market, enticed by some real opportunities."

In the Costa Brava, foreign investment in residential property has also grown significantly. In 2010, foreign investment in new housing properties accounted for 9 per cent of the market. In 2014, foreign investment represented 26 per cent of the market.

Russian buyers accounted for a quarter of all sales in Maresme by Lucas Fox in 2014. This figure, though. is expected to dwindle in 2015, as the rouble goes further into free fall.

Conversely, an increase in interest from Northern European buyers, especially from the UK and Scandinavian countries, is expected.

"Given the worsening economic situation in Russia and the Rouble's continued struggles against the Euro, the number of Russian buyers will inevitably fall further," explains Tom Maidment, Partner of Lucas Fox Costa Brava.

"On the other hand, the strength of the GB Pound and the likelihood that it will strengthen further against the Euro should attract an ever greater number of British buyers to the market in 2015. Also, since the unpegging of the Swiss franc against the euro and its subsequent rise, we have already noticed an increase in the number of Swiss buyers."

"With unemployment falling, the economy growing faster than predicted and property reaching the bottom, 2015 is set to be a pivotal year for Spain's property market," adds Vaughan.

"Prices are on average 40 per cent below what they were since the start of the crisis in 2007 and we predict a slow an steady recovery. This is an opportune time to invest."