Foreign buyers now account for nearly 40% of coastal sales — what that means for investors

Foreign demand is reshaping real estate Spain — fast and uneven

Real estate Spain is experiencing a buyer shock: more than 39% of last year’s home sales in major tourist provinces involved foreign buyers. That statistic from the national property register is not an abstract market headline; it is a concrete force changing pricing, competition, and strategy on the Costa del Sol, Costa Blanca and the Balearic Islands.

The shift is driven by a mix of geopolitics, wealth diversification and lifestyle preference. In this article we unpack who is buying, why they are buying, where prices are moving fastest, and what buyers and investors should do now. We use official register data, not speculation, and we draw on interviews and market commentary from developers, agents and analysts who are active on the ground.

Quick snapshot

• 39% of home sales in key tourist provinces involved foreign buyers (property register).
• Polish purchases tripled since 2019 and made up 4% of foreign purchases in 2023.
• Gilmar reports U.S. buyers rising from 0.5% to 6.2% of its transactions from 2024 to 2025 on the Costa del Sol.
• Luxury home prices rose up to 9.5% year-on-year, according to Knight Frank data cited by Reuters.
• Spain’s central bank cites a shortage of 750,000 homes and calls for coordinated supply-side policy.

These figures are why we are no longer reading about an incremental uptick in foreign demand — we are seeing a structural reweighting of buyers in Spain’s tourist regions.

Who is buying and why: nationalities, motives and money

The composition of foreign buyers in Spain is expanding beyond the traditional British and German markets.

Nationalities on the move

• Poland: Purchase activity has tripled compared with 2019 and was 4% of foreign purchases in 2023, driven by economic growth in Poland and a security search after the war in Ukraine. Developers such as Neinor report heavy Polish demand — for example, 70% of the Santa Clara complex in Marbella went to Polish clients.
• United States: Gilmar reports U.S. buyers increased sharply — from 0.5% to 6.2% of its transactions within a year on the Costa del Sol, with Americans overtaking Britons as the top buyer group in that brokerage’s deals. Nationwide, Americans accounted for 2% of foreign purchases and paid the third-highest average price, per the General Council of Notaries.
• Gulf states / Dubai: Wealthy clients from the Gulf are negotiating luxury deals on the Costa del Sol after regional instability dimmed Dubai’s image as the safe haven for the ultra-rich. Real estate firms have closed at least a couple of deals with buyers from Dubai.

Why they are buying

Buyers are motivated by a mix of security, asset diversification and lifestyle:

• Geopolitical shelter: Buyers from Poland, Ukraine and the Gulf view Spanish property as a safer base during regional conflicts.
• Political anxiety: Some American buyers — notably those with Hispanic ties — see Spain as a “Plan B” amid political uncertainty in their home country.
• Investment yield and capital growth: Rising luxury prices and an active short-term rental market make property an appealing store of value for high-net-worth individuals.
• Tax features: Regional tax allowances and exemptions can be attractive to wealthy foreigners compared with their home jurisdictions.

I’ve seen this pattern repeatedly: once a new buyer cohort reaches a critical mass, buying behavior accelerates because of herd dynamics and price momentum.

Where prices are rising and why the luxury segment leads

Price growth is not uniform across Spain. The most intense pressure is in coastal, tourism-led markets and in the upper tiers of the market.

Geographies seeing the biggest impact

• Costa del Sol (Málaga / Marbella / Benalmádena): High foreign share of transactions and heavy luxury demand. Developers report rapid sell-through on premium projects.
• Costa Blanca (Alicante / Benidorm): New-build towers and seafront apartments are popular with Poles and other European buyers — a 64-floor Benidorm project has a large Polish client base.
• Balearic Islands: Long-established magnet for northern European and Mediterranean buyers; foreign buyer share also high.

The premium effect

Agents and developers handling properties priced between €1 million and €20 million say rising values have become a reason to buy, not just an outcome. That is important. When price appreciation becomes part of the sales pitch, demand from investors who focus on capital gains grows, reinforcing upward momentum.

Knight Frank’s Jack Harris reported that luxury home prices in Spain rose by as much as 9.5% year-on-year, stronger than France or Italy. That performance leaves luxury segments as the standouts in the market.

Supply constraints, policy context and the macro picture

The surge in foreign demand is colliding with structural supply issues.

• Spain’s central bank puts the housing shortfall at 750,000 homes and has called for coordinated measures to increase supply and rein in price pressure.
• Housing affordability is already a major political issue in Spain; rapid price gains in coastal markets pile pressure on local policymakers and residents.
• Local regulations on tourist rentals, zoning rules and planning delays limit how quickly new supply reaches market.

From a policy perspective, higher prices create political momentum for supply measures — but the reality of planning, infrastructure and municipal politics means those measures can take years to produce units. That matters for investors because continued tight supply amid rising demand can prolong price growth, but it also increases the political and regulatory risk of retrospective measures such as stricter rental rules or higher levies on non-resident owners.

Practical takeaways for buyers and investors

If you are considering buying property Spain — particularly on the coast — here are practical steps and considerations derived from market realities and the experience of agents and lawyers active in these markets.

Due diligence and documentation

• Use a local property lawyer with experience in non-resident transactions. The market has international buyers making quick purchases over the phone; that increases the chance of errors or surprises.
• Check title, encumbrances and compliance with local building and rental licences.