Russians are looking for a home in Spain
Operations during the first half of 2023 were at the highest level in the last 9 years, according to notarial statistics
Real estate agency focused on foreign buyers in Palma
Purchases skyrocket by 50 %
Foreigners continue to want to buy houses in Spain, but they are also affected by the economic environment that is slowing down the real estate market. According to data from the Notarial Statistical Information Center, released this Wednesday, in the first half of 2023, home purchases in Spain by foreign citizens fell by 7.5%. But this situation does not seem to affect those who have Russian nationality. In their case, operations grew by more than 50% in the period and, for the first time since 2014, the semiannual volume exceeded 2,000 sales and purchases. “They have it more difficult when buying due to anti-money laundering regulations,” says a real estate agent specialized in Eastern European markets on the phone. A setback, he adds, that they overcome because “now many come with other nationalities, sometimes with Israeli, American and even Ukrainian passports.”
The figures express a resurgence of this profile of buyers as has not been seen in a long time. If in the first half of last year, when the Russian invasion of Ukraine occurred, home purchases in Spain by Russian citizens remained at 1,423 operations, between January and June of this year they have climbed to 2,137. It is the highest volume for a semester since the first half of 2014, when the Spanish real estate market was going through a very different moment, with historically low prices because it was still reeling from the 2008 crisis and when the golden visas (known as golden visas, that facilitate nationality in exchange for a large real estate investment) had more traction.
But if the economic profile of Russian buyers has barely changed over the years, the origin of those families has. Although of Russian nationality, the aforementioned real estate agent – who is based in the Valencian Community and asks not to be identified due to the “discretion” required by his business – says that the majority of those who buy now do not come from that country. These are wealthy families who already had residence in another European country, or even in Spain, and change residence without worrying too much about the rise in interest rates. “They almost always pay in cash,” says the professional, who draws attention to another significant movement: “We have greatly noticed the arrival of Ukrainians with high purchasing power.” In fact, according to notarial data, it is the second nationality, after the Russian, with the greatest increase in operations: 42% in the last year, exceeding 1,700 purchases and sales in the semester, which is the maximum in the statistical series that starts in 2007.
“The era of the middle class ended a long time ago,” says Alfredo Millà, CEO of Sonneil, “since the annexation of Crimea [in 2014], with the rise of the ruble, they only continued to buy Russians with money outside of Russia, because if not the house would cost them twice as much.” Sonneil, an emerging company specialized in the marketing of properties in beach areas, prepared a report this summer in which, with data from the second quarter of the year, it already linked “the extension of the war [in Ukraine]” with the new boom from Russian buyers.
More weight than ever
The data now released by the General Council of Notaries, collected in notaries throughout Spain, now confirm this trend. Also regarding the general decrease in operations carried out by foreign citizens. In volume, the second semester approached 68,000 operations, with the aforementioned decrease of 7.5%. However, out of 318,000 total sales, foreigners gained market share. 21.4% of the homes that changed hands went to non-Spanish citizens, which is an absolute record. The reason is that, although fewer houses were purchased than in the same period in 2022, the drop was even steeper (-13.9%) for national buyers.
The behavior was not the same in all autonomous communities. In the Balearic Islands, sales by foreigners fell by 32% compared to the same period last year. But four territories are saved from burning: in two of the most notable for the weight of second homes, the Valencian Community and Murcia, operations grew discreetly. And in the northwest they skyrocketed with an increase of close to 15% in Galicia and more than 27% in Asturias. “It goes by zones,” confirms José García Montalvo, professor of Economics at the Pompeu Fabra University. For this real estate market expert, the greatest resistance of foreign buyers is due to the fact that “housing in Spain is cheap for them because their income level is higher.” But at the same time, the decrease in absolute figures is due to a context of «economies even more limping than the Spanish one, which is one of the fastest growing in the EU.»
Rising prices
In prices, the market shows that it continues to tighten despite the fact that activity has put on the brakes. With an average of 2,085 euros per square meter (that is, just over 200,000 euros for a 100 square meter apartment), the amount increases by 1.3% compared to what was paid in the first half of last year. And the bill was even more expensive for foreigners. For non-residents, who spend the most with an average of 2,598 euros per square meter, the year-on-year increase reaches 2.8%. For resident foreigners, with 1,676 euros per square meter, the average price rises by 2.9%.
What is not new is the appreciation of the British for Spanish brick. They represented almost one in 10 sales carried out by foreigners since United Kingdom citizens bought 6,498 houses between January and June (9.6% of the total). The next nationalities with the largest market share were Germans (8.1%) and Moroccans (7.3%). On the other hand, in terms of average prices, it is the Swedes (3,036 euros per square meter) and the Danes (2,930 euros) who spend the most.
In the combination between nationality and territory where the home is located, the map changes a lot depending on the type of buyer. Among foreigners residing in Spain, Moroccans or Romanians appear as the most active in the market in all communities except three: Galicia (Portuguese), Balearic Islands (German) and Canary Islands (Italian). However, among non-residents, the French appear as the most frequent nationality in a greater number of communities. Their predominance is clear in northern Spain and in total they were the first buyers in seven territories: Galicia, Castilla y León, the Basque Country, Navarra, Aragon, Catalonia and Extremadura. The Germans dominate three (Balearic Islands, Canary Islands and Cantabria) and the British dominate two (Andalusia and Murcia), as do the Americans (La Rioja and Castilla-La Mancha). In the rest, Argentines were the most active nationality in the Asturian real estate market, the Chinese in Madrid and the Belgians in the Valencian Community.