British Buyers Still Keen… and Increased Interest from Scandinavians
As the Costa del Sol real estate market continues to maintain a robust dynamic in the first quarter of 2018, concerns about Brexit remain on the backburner and there are positive developments in the market’s other evolving demographic scenarios.
First to Brexit and a question posed by Mark Stücklin in his authoritative Spanish Property Insight news bulletin: The British voted to leave the EU in a referendum in June 2016. What impact has the referendum result had on British demand for Spanish property so far?
“Surprisingly little,” he notes. “The number of British buyers dropped significantly in the second half of 2016 after the referendum, but has been recovering since then. In annualised terms, British demand declined for five quarters between Q3 2014 and Q3 2017, but then started growing again in Q4 20017.”
According to Stücklin, agents and developers are reporting an increase in British buyers with budgets above €400,000, and a fall in numbers in the middle market between €200,000 and €400,000. “Some buyers in the middle market are trading down, bolstering the lower end. I’ve heard one theory that Brits with financial resources are getting money out of the U.K. and into European assets like Spanish property before Brexit really bites.
“There is a correlation between British demand for Spanish property and the strength of the pound. But whilst the pound has fallen below its level in 2013, British demand has been far more resilient. A weaker pound means that some British buyers will be trading down, but in volume terms British demand has been surprisingly unaffected by the referendum result.”
The British remain the largest group of foreign buyers of Spanish property, almost double the second-placed French, but other nationalities are also taking up the slack.
In its latest property update, leading Spanish homebuilder Taylor Wimpey España reports, “Interest in Spanish real estate from Scandinavian nations is rising steadily as life in sunny southern Spain draws buyers from colder climes. Swedish buyers, especially those looking for a second home in Spain, have increased in recent years, now ranking amongst the top-five nationalities of foreign purchasers.”
This trend was confirmed in a report by Knight Frank. “Easy direct access to many parts of Spain has particularly fuelled foreign property investment in recent decades. And as Swedes are one of the world's best travelled nations, Scandinavian low-cost agency Primera Holidays is establishing an arm in the U.K. to offer new trips to popular destinations in Spain, making the region a hotspot for even more buyers in 2018.”
As Marc Pritchard, sales and marketing director of
Taylor Wimpey España, concludes, "Spain's economy is the fastest growing in the Eurozone, bringing greater confidence back to the property market and thus attracting demand from northern European countries. Over the last few years, we have seen a real boost from Swedish buyers especially. Norwegians and Danes are also increasing their Spanish property purchases. Norwegians made up 2.2 per cent of foreign sales in 2017, while Danes accounted for one per cent of sales, according to the annual data from the Spanish registrars.”
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