Tourism plays a key role in the Spanish economy. The Spanish culture and weather attract a large number of foreigners to the country every year, with more than 50 million foreign visitors travelling to the cities and seaside resorts, mainly from the more northern regions of Europe.
Visitors to Spain do not just visit the country with the aim of enjoying a few weeks holiday, as in 2015, 12.7% of all properties sold in the country were bought by foreigners. Spain is the second most popular destination for retirement for Europe wide, beaten only marginally by the United States.
Property market collapse of 2008
The flow of foreign buyers has not been uniform during the past few years. The economic crisis that affected Spain in 2007-2008 led to a significant decrease of foreigners interested in investing in a Spanish property. The percentage of properties bought by foreign buyers fell from 8.97% in 2006 to a mere 4.24% in 2009, a drop of more than 50 percent. The economic crisis badly affected the real estate market and it had a direct repercussion on the foreign investors.
Nevertheless, the situation started to change in 2010 where there was an increase of 0.21% of foreigners investing in Spain. This increase continued the following years, with 6.04% of foreign house buyers in 2011, and 8.12% in 2012. In 2013 the figures reached the 8.63% – an important figure taking into account that it was even higher than the number of buyers in 2007 which was 8.29%, and the year of the beginning of the crisis when the level of the overseas buyers began to decrease. This trend reached its peak in 2015 when the percentage was almost 13%.
Interest varies from region to region
The amount of foreign buyers is not uniform over the whole Spanish territory as interest varies considerably depending on the region. Unlike in the UK and France where London and Paris as capital cities are the most desired locations, in Spain this is not the case. Spain’s capital city, Madrid, is not as popular as the coastal areas. The excellent climate, warm and calm sea, and unique culture make the Spanish resorts among the most visited tourist locations in Europe.
Among the seaside “Comunidades Autónomas”, the political Spanish divisions of the territory, Valencia, Andalucía and Cataluña are extremely popular relocation destinations. Valencia is the top region with regards to the number of overseas household buyers with 20,219 purchasers in 2015, followed by Andalucía with 14,384 and Cataluña with 10,264. Just these three regions represent 64.87% of the total purchases in 2015, which was 69,166.
The importance of foreign investment in Spain is clear; and the country has been taking advantage of its characteristic features in order to attract the highest possible number of clients. Systems are in place to attract overseas buyers which seem to be working, which is excellent news for this Southern European country that was hit harder than most by the global recession of 2008.