International buyer boosts Spanish real estate market

The sale of new residential homes continues to be in good shape. The main reasons why demand for them has remained stable in recent challenging years at all levels, surrounded by inflation and rising interest rates, are two things.

First, new residential homes are a rare asset (only one in five homes sold is new) and are very different from used homes. They also provide energy efficiency, save on energy costs, have better soundproofing, have improved finishes such as heated floors that improve decorating options, and more. All of these details are rare or simply not available in used homes. Those of us who''s considerable experience in real estate, compare this moment to the emergence of color TVs in the audiovisual world: a small number of expensive models compared to a much cheaper and similar product in black and white, but not replacing it at all.

And the second reason: the foreign buyer is stronger than ever. As all the statistics indicate, foreigners are buying more homes in Spain from 2022 than ever before. According to the latest April to June sales figures published by the College of Property Registrars, demand from foreign buyers accounts for 15% of the total number of transactions. Let's focus on the second of these key factors - the large presence of foreign buyers in the market''real estate. This is beneficial for the sector, as it complements national buyers in the segment of vacation homes, as well as for the economy as a whole thanks to the 'export' of these homes. In addition, the income of foreign customers is linked to economic cycles different from those we experience in the Spanish economy, which stabilizes the demand for a cyclical sector such as real estate.

Let's look at these three unique advantages of foreign buyers in order.

As an example, Aedas Homes, Spain's leading property developer, sold almost a third of its homes to foreign customers in 2022, representing 28.7% of the company's total transactions, up 10 points from 2021.