Foreign buyers are paying up to 75% more per m² in Spain — who wins and who loses

Risks and market stresses to watch

The split in buyer behavior raises tangible risks and frictions.

• Affordability pressure: In coastal hotspots, local households may find supply of affordable housing squeezed as higher-priced second homes soak up available inventory.
• Community impacts: A concentration of second homes can hollow out local communities outside peak seasons and complicate local planning.
• Policy reaction: Municipalities or regional governments could introduce measures to protect primary housing stock, such as taxes on vacant properties or limits on short-term rentals. That could affect returns for investors.
• Price sensitivity: The premium paid by non-residents is vulnerable to external shocks such as currency moves, travel restrictions or changes in home-market wealth. Demand at the top can be volatile.

We need to be clear: a 5% rise in average price paid by foreigners and a 9.4% rise among resident foreigners are substantial, but they do not guarantee uninterrupted growth. External factors and local policy can change the picture rapidly.

Practical steps for different players

Buyers looking to compete with non-residents

• Be prepared to act quickly in premium locations and to present clean, bankable financing.
• Consider widening your search area to neighbouring inland towns or suburbs where local affordability remains stronger.
• Request full transaction histories from vendors when possible so you can benchmark offers.

Sellers hoping to capture foreign demand

• Invest in professional photography, multi-language listings and an international marketing plan.
• Highlight features that appeal to second-home buyers: proximity to coast, airport access, recently renovated kitchens and rental income history.

Investors assessing yield

• Stress-test returns for policy changes on short-term rentals and other rules that target holiday accommodation.
• Factor in periods of seasonal occupancy when modelling ROI in resort towns.

Agents and developers

• Build buyer personas for non-resident and resident foreigners separately; their purchase motivations differ and so should your pitch.
• Track notarial data regularly — it is a reliable source for price-per-square-metre trends.

How this changes the talking points for policy and planning

The split in prices is not only an issue for market participants. It has implications for local governments and planners who must balance tourist income with community needs.

• Tax policy: Regions may consider differential levies to discourage speculative purchases that remove stock from the primary market.
• Zoning: Municipalities can prioritise affordable housing projects in high-demand zones.
• Data transparency: Authorities benefit from detailed transaction reporting so they can design targeted interventions.

The data from the Consejo General del Notariado gives policymakers a clearer picture: foreign demand is concentrated and powerful enough to shape local markets in certain places.

Where the market might go next

A few realistic scenarios appear likely:

• Continued price resilience at the top end: As long as international buyers seek second homes in Spain, premium segments will likely stay supported.
• Slower transaction volumes: The small decline in foreign purchases suggests activity could stabilise at a lower level, particularly if interest rates or international mobility change.
• Gradual narrowing or persistence of the gap: If more buyers convert from seasonal visitors to resident foreigners, we might see the higher-per-m² pattern broaden across more purchase types. Conversely, policy measures aimed at protecting primary housing could narrow the gap.

We do not know exactly which path the market will follow, but the key variable is external demand for lifestyle properties.

Final assessment: where to focus if you act now

For anyone active in the Spain property market, the central lesson is simple: know which buyer base dominates the area you are targeting. Price per square metre can vary wildly depending on whether the location is a magnet for non-resident lifestyle buyers.

• If you are buying in coastal hotspots, expect to face competition from non-resident buyers who on average pay about €3,242 per m².
• If your search is for a primary home and local affordability matters, focus on areas where foreign non-resident demand is low.

We see an enduring dual market where lifestyle/investment demand lifts the top end and local buyer affordability sets the mainstream market. That split creates opportunities for sellers and targeted investors, but it imposes real affordability pressures on buyers tied to local salaries.

Frequently Asked Questions

Q: Are all foreign buyers paying more for property in Spain?

A: No. The premium is concentrated among non-resident foreign buyers, who paid €3,242 per m² on average. Foreign residents paid €1,963 per m², which is much closer to the €1,839 per m² average for Spanish buyers.

Q: Has foreign demand for Spanish property fallen?

A: Transaction numbers for foreign buyers fell by 4.4%, but foreigners still accounted for 18.4% of all property transactions. Price levels for foreign purchases rose 5% year-on-year overall, and 9.4% specifically for foreign residents.

Q: Which areas are most affected by the foreign buyer premium?

A: The effect is clearest in coastal and resort areas — Mediterranean coasts, the Balearics and Canaries and certain prime urban pockets. These locations attract non-resident buyers seeking second homes or holiday investments.

Q: What should a local buyer do to compete?

A: Local buyers should widen their search area, be finance-ready, and work with agents who can identify properties unlikely to attract strong non-resident bidding. Understanding transaction history and buyer profiles in your target area will give you a tactical advantage.

For anyone buying or selling in Spain now, the practical takeaway is direct: check the local composition of demand before you pitch price, plan financing to match the market you face, and remember that non-resident buyers are paying about €3,242 per m² on average in late 2025 — a figure that will shape offers in many coastal hotspots.