Britain has confirmed it will hold a referendum on continued membership of the European Union on 23rd June 2016. The vote looks likely to be close.
Since British buyers are a very active part of the property market, we wondered what might happen if a “Brexit” led to a fall in UK buyer activity?
The most reliable numbers we have on British buyer activity come from the registrars:
British buyers as % of the housing market – www.registradores.org (2014)
The real question is how disruptive a “leave” vote be – and on balance we think the effects of Brexit would be very limited.
Nothing happening anytime soon
In the interim the UK would need to invoke Article 50 of the Lisbon Treaty in order to leave, and it would likely take a further two years to disentangle the country from Europe. In other words: This time next year Britain will still be in the EU and British buyers will have the same rights they have today.
In the longer term we expect to see a bilateral deal emerge that would (at worst) make it only slightly harder for UK buyers to invest in Spain. EU membership is hardly a barrier to investment: China is outside of the EU but it hasn’t stopped the Chinese taking an active part in the Madrid property market; British buyers would be no different.
Regional variations
International buyers are a diverse group and some regions will clearly be affected more than others, so we’ve compiled a list of British vs. other nationalities in each region of Spain. The effects of Brexit would be very localised: Murcia is most exposed but even the worst scenarios would only see the market move in single digits.
Overseas investment by region:
| Andalucia | Cantabria | La Rioja |
| Aragon | Castille and Leon | Madrid |
| Asturias | Castille La Mancha | Murcia |
| Balearic Islands | Catalonia | Navarra |
| Basque Country | Extremadura | Valencia |
| Canary Islands | Galicia |
Andalucia
International buyers make up 15.4% of the housing market in Andalucia.
| Nationality | % of int’l buyers |
|---|---|
 United Kingdom |
22.91 |
 Sweden |
9.44 |
 Belgium |
8.17 |
 Russia |
5.59 |
 Norway |
5.42 |
 France |
5.11 |
 Germany |
4.43 |
 Morocco |
3.44 |
 Netherlands |
2.71 |
 Denmark |
2.54 |
| Others | 30.24 |
Aragon
International buyers make up 4.2% of the housing market in Aragon.
| Nationality | % of int’l buyers |
|---|---|
 Romania |
32.68 |
 China |
11.55 |
| Morocco |
7.04 |
| France |
3.66 |
 Algeria |
3.38 |
 Ukraine |
3.1 |
 Bulgaria |
1.97 |
 Italy |
1.69 |
| United Kingdom |
1.69 |
 Peru |
1.41 |
| Others | 31.83 |
Asturias
International buyers make up 1.8% of the housing market in Asturias.
| Nationality | % of int’l buyers |
|---|---|
| Romania |
22.47 |
| France |
6.74 |
 Poland |
5.62 |
| Germany |
4.49 |
| Belgium |
4.49 |
| Italy |
4.49 |
 Portugal |
4.49 |
| Ukraine |
3.37 |
| United Kingdom |
3.37 |
 Mexico |
2.25 |
| Others | 38.22 |
Balearic Islands
International buyers make up 32.6% of the housing market in the Balearics.
| Nationality | % of int’l buyers |
|---|---|
| Germany |
34.56 |
| United Kingdom |
19.4 |
| Sweden |
7.02 |
| France |
5.64 |
| Italy |
5.05 |
 Switzerland |
2.79 |
| Russia |
1.84 |
| Belgium |
1.61 |
| Netherlands |
1.51 |
 Austria |
1.31 |
| Others | 19.27 |
Basque Country
International buyers make up 1.5% of the housing market in the Basque Country.
| Nationality | % of int’l buyers |
|---|---|
| China |
15.82 |
| Romania |
8.67 |
| Italy |
7.14 |
| Portugal |
6.63 |
| United Kingdom |
5.1 |
| Russia |
4.59 |
| Germany |
3.57 |
 United States |
3.06 |
 Argentina |
3.06 |
| Morocco |
3.06 |
| Others | 39.3 |
Canary Islands
International buyers make up 27.4% of the housing market in the Canaries.
| Nationality | % of int’l buyers |
|---|---|
| United Kingdom |
19.54 |
| Italy |
17.74 |
| Germany |
13.87 |
| Belgium |
9.99 |
| Russia |
3.85 |
| France |
3.68 |
| Sweden |
2.68 |
| China |
2.07 |
 Ireland |
2.01 |
| Poland |
1.8 |
| Others | 22.77 |
Cantabria
International buyers make up 1.9% of the housing market in Cantabria.
| Nationality | % of int’l buyers |
|---|---|
| France |
13.13 |
 Moldova |
7.07 |
| Romania |
6.06 |
| China |
5.05 |
| Germany |
4.04 |
| United Kingdom |
4.04 |
| Mexico |
3.03 |
| Russia |
3.03 |
| Peru |
2.02 |
| Netherlands |
2.02 |
| Others | 50.51 |
Castille and Leon
International buyers make up 1.2% of the housing market in Castille and Leon.
| Nationality | % of int’l buyers |
|---|---|
| Romania |
7.07 |
| Bulgaria |
5.39 |
| China |
4.04 |
| France |
2.02 |
| Morocco |
1.68 |
| Portugal |
1.35 |
 Brazil |
1.35 |
| United Kingdom |
0.67 |
| Ukraine |
0.67 |
 French Guiana |
0.67 |
| Others | 75.09 |
Castille La Mancha
International buyers make up 1.4% of the housing market in Castille La Mancha.
| Nationality | % of int’l buyers |
|---|---|
| Romania |
21.69 |
| Morocco |
10.84 |
| China |
10.24 |
| Ukraine |
4.22 |
| Bulgaria |
3.61 |
| Italy |
2.41 |
| Brazil |
2.41 |
| Argentina |
1.81 |
| Peru |
1.81 |
 Paraguay |
1.81 |
| Others | 39.15 |
Catalonia
International buyers make up 13.2% of the housing market in Catalonia.
| Nationality | % of int’l buyers |
|---|---|
| France |
29.31 |
| Russia |
9.8 |
| Italy |
5.34 |
| China |
4.91 |
| United Kingdom |
3.86 |
| Belgium |
3.77 |
| Germany |
3.67 |
| Morocco |
3.22 |
| Romania |
2.45 |
| Ukraine |
1.83 |
| Others | 31.84 |
Extremadura
International buyers make up 0.5% of the housing market in Extremadura.
| Nationality | % of int’l buyers |
|---|---|
 Morocco |
6.52 |
| Belgium |
4.35 |
| Portugal |
4.35 |
| United Kingdom |
4.35 |
| Others | 80.43 |
Galicia
International buyers make up 0.6% of the housing market in Galicia.
| Nationality | % of int’l buyers |
|---|---|
| Portugal |
5.94 |
| United Kingdom |
4.95 |
| China |
4.95 |
| Romania |
3.96 |
| Russia |
3.96 |
| Switzerland |
3.96 |
 Venezuela |
3.96 |
| United States |
2.97 |
| Argentina |
2.97 |
| Brazil |
2.97 |
| Others | 59.41 |
La Rioja
International buyers make up 2.7% of the housing market in La Rioja.
| Nationality | % of int’l buyers |
|---|---|
| Romania |
30.43 |
| Morocco |
8.7 |
| Italy |
5.8 |
| France |
5.8 |
| Portugal |
4.35 |
 Armenia |
4.35 |
 Georgia |
2.9 |
 Bolivia |
2.9 |
 Pakistan |
2.9 |
 Colombia |
2.9 |
| Others | 28.97 |
Madrid
International buyers make up 4.5% of the housing market in Madrid.
| Nationality | % of int’l buyers |
|---|---|
| China |
21.53 |
| Romania |
14.27 |
| Italy |
7.4 |
| Morocco |
4.09 |
| France |
4.04 |
| Ukraine |
3.6 |
| United Kingdom |
2.87 |
| Venezuela |
2.58 |
| Bulgaria |
2.09 |
| Russia |
2 |
| Others | 35.53 |
Murcia
International buyers make up 15.9% of the housing market in Murcia.
| Nationality | % of int’l buyers |
|---|---|
| United Kingdom |
44.29 |
| Norway |
6.32 |
| Belgium |
6 |
| France |
5.48 |
| Morocco |
4.77 |
| Sweden |
3.74 |
| Germany |
2.77 |
| Netherlands |
2.19 |
| Russia |
2.13 |
| China |
2 |
| Others | 20.31 |
Navarra
International buyers make up 2.3% of the housing market in Navarra.
| Nationality | % of int’l buyers |
|---|---|
| China |
9.9 |
| Morocco |
8.91 |
| Ukraine |
8.91 |
| Portugal |
7.92 |
| Romania |
7.92 |
| Bulgaria |
6.93 |
| Russia |
5.94 |
| Italy |
4.95 |
| France |
3.96 |
| Moldova |
3.96 |
| Others | 30.7 |
Valencia
International buyers make up 27.1% of the housing market in Valencia.
| Nationality | % of int’l buyers |
|---|---|
| United Kingdom |
15.57 |
| Russia |
11.84 |
| France |
9.11 |
| Belgium |
8.71 |
| Sweden |
7.97 |
| Norway |
6.71 |
| Algeria |
6.49 |
| Germany |
3.9 |
| Netherlands |
3.3 |
| China |
2.44 |
| Others | 23.96 |
The Bottom Line
We don’t see Brexit as a major problem, especially if you deal with a broad range of nationalities. The timeline is slow, the market is diverse and alternative arrangements are unlikely to dent the British love affair with Spain.
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