The growing interest of foreign buyers in Costa del Sol properties

8th June 2024

The international charm of the Costa del Sol

The growing interest of foreign buyers in Costa del Sol properties

The Costa del Sol continues to be an attractive destination for international buyers, with a notable increase in the purchase of properties by foreigners. According to the College of Property Registrars, in 2023, almost 15% of real estate transactions in Spain were carried out by foreigners. 

This summer, a significant rise in these transactions is expected, particularly in the coastal areas.

Economic factors and attractive areas

The economic impact of these purchases is considerable. A recent report by the Association of Developers and Builders of Spain and the consultancy firm PwC revealed that acquisitions of properties by foreigners contributed 6.351 million euros to the GDP in 2022, with 1.758 million corresponding to new constructions.

The most attractive areas for international buyers include the Valencian Community, Andalusia, Murcia, Canary Islands, and Catalonia. In particular, the Valencian Community leads with 27% of total transactions by foreigners in 2023, followed by Andalusia and Catalonia with 16% each.

Profile and preferences of foreign buyers

Idealista/hipotecas describes the typical profile of the foreign buyer as a person aged 41 years with an average household income of over 5,900 euros per month, interested in properties with an average price of 213,000 euros

The Mediterranean area is preferred, and the fixed-rate mortgage remains the favored option for financing the purchase.

Mortgages and conditions

Conditions for non-resident mortgages are more restrictive due to the higher risk assumed by banks. Instead of covering up to 80% of the appraised value of the property, entities lower it to 70% or even 60% in certain cases, which requires a higher prior savings from the buyer.

Trends and expectations

According to Anna Puigdevall, general director of ANAI and treasurer of FIABCI Spain, property purchases by foreigners remain strong, with a notable increase in the first quarter of 2024 compared to the last quarter of 2023. 

During the summer months, this second residence market is expected to rise even further, once again surpassing last year's figures.

Nationalities and market changes

Britons remain the nationality that buys the most properties in Spain, representing 15.5% of total non-resident mortgages signed in 2023, followed by Germans (14.1%) and Swiss (9%). 

However, there is an increase in purchases by Belgians, Germans, and Americans.

Economic impact and opportunities

The report highlights that property purchases by foreigners not only benefit the local economy but also raise the standards of quality and demand for services in highly attractive areas, especially in the Costa del Sol and other Mediterranean regions.

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