It’s data time again. That time when we look at the most recent international foreign sales data and use it to try to understand the actions of foreign buyers. Which areas are they interested in and which are falling out of favour? As agents marketing to international buyers, there’s a good deal you can learn from this valuable report.
Trends this quarter
The data from Q1 2019 suggests there are still plenty of positive signs in the international housing market. This first quarter of the year saw 23,643 Spanish sales to international buyers, up 5.47% on Q1 2018. International sales represent around 17% of total house sales meaning there’s been no significant overall change in the rate of foreign purchases over recent years. In fact, we’d go as far as to say the future looks pretty good for agents working in international property sales.
Which are the most popular destinations for international buyers?
From the sales data, we can see the locations that are currently most popular with foreign buyers. Alicante remains in the top spot, with 48% of foreign market share down only 1% from last quarter, but 4% year on year. Fellow coastal expat hotspot Málaga sits in position 4 with a 31% market share and an 8% fall since last year.
Again, following the recent pattern, it’s the islands that make up the rest of the top five. This time Tenerife in second (36% market share), Las Palmas in third (31%) and The Balearics (31%) in fifth place. Interestingly, all these ‘top five’ have fallen in terms of their % foreign sales since last year, the islands significantly, with Tenerife down by 15%, Las Palmas by 16% and The Balearics by 18%. This leaves us to wonder whether it’s possible that these long-popular destinations have reached their peak. Are investors looking for better value elsewhere? And if so where?
Which locations are rising in popularity?
First, let’s look and see what’s happening in the rest of the top ten.
Positions six to ten in the list are occupied by Girona (up 16%) followed by Murcia (up 21%), Almería (up 22%), Castellón (up 9%) and Tarragona (up 13%). It’s easy to see that all of these have risen fairly significantly in terms of the % of foreign sales year on year. In fact, every other one of the remaining 40 provinces on the list (except Segovia) have increased in terms of their foreign sales, suggesting things are generally positive for international sales.
But which locations are rising the fastest?
Fastest riser overall is the northern province of Palencia in the region of Castile-León at an incredible 157%, while the second-fastest riser is the city of León in the same region, at 123%. While this may seem to suggest a pattern, it’s important we look closer at the data. In this case, we see that in Palencia only 18 properties were sold to foreigners while in León the figure is a mere 49. This suggests that the findings are not particularly significant.
One notable rise we’ve spotted is that of Catalonia’s capital city, Barcelona. Increasing its foreign market share from 12% to 14% since last month and up 34% year on year, could we be seeing a resurgence in the popularity of city centre properties for immigrants?
Only time will tell, but you can rely on us to keep an eye on these trends for you.
What does this mean for you?
When we see a list of locations that are performing well it can be tempting to invest time looking for properties to market in these areas. But it is important to interrogate the numbers properly and look at the facts behind the trends. Fast risers might be simply due to a blip in numbers, meaning it’s important to look at the data over time. But if you can identify provinces that are rising up the ranks month on month it could be well worth investigating property options in those areas.
In the first quarter of 2019, as at the end of the previous year, we’re seeing falling foreign island sales and a rise in the popularity of coastal regions. It seems investors are seeing many of the same benefits as the islands in areas such as Alicante and Málaga, but without the hefty island price tags.
Don’t completely shy away from the islands however, as sales are still undeniably strong. Just make sure you market the properties on your portfolio to the best of your ability, creating great property listings and optimising your photos to stand out from the competition.
And, of course, keep an eye on Spanish housing market data with Kyero so you can always stay one step ahead of the game.