The Spanish property market continues to perform close to its best results over the past several years. Despite fluctuations in the number of transactions concluded, one thing remains constant – Andalusia is the region generating the most interest among investors – not only from Europe.
Quarterly growth and slight year-on-year decrease
The second quarter of 2023 confirmed the experts’ predictions regarding the situation of the Spanish property market, which, after an increase in the number of transactions in Q1 (at 7.2%), this time recorded a 5.2% decrease quarter-on-quarter and a 7% decrease compared to Q2 2022. However, the results are still high and confirm the strength of the market and its attractiveness to investors from all over the world. In Q2 2023, 151,983 Spanish property purchase and sale transactions were registered – more than 9,000 fewer than in January-March 2023.
The breakdown between secondary and primary market shows quarterly declines in both categories, with rates of -5.7% and -5.6% respectively. Compared to the same quarter of 2022, it is the secondary market that has seen a correction – as opposed to an increase in the primary market. The secondary market registered 123,244 buy-to-let transactions and a decrease of 1 2,786 transactions, while the primary market registered 28,739 transactions, with an increase of 860 transactions.
Andalusia continues to reign supreme over other regions
When looking at this year’s results, it is impossible to ignore the achievements of Andalusia against the backdrop of the individual autonomous communities, which is also enjoying success due to favourable tax changes (you can read more about them here). In previous years, when uninterrupted increases were evident, this applied to all communities. However, this situation was not repeated in Q2 2023. The territorial distribution of the results shows that only four communities achieved quarter-on-quarter growth, with decreases in 13.
The Autonomous Communities that registered the highest number of housing sales transactions in Q2 2023 are: Andalusia (30,698), Valencia (25,114), Catalonia (24,210) and the Community of Madrid (18,895). Their market shares in relation to the whole of Spain were 20.46%, 16.12%, 15.95% and 12.35% respectively. These four communities together therefore account for more than 64% of the market for property purchase and sale transactions in Spain, while none of the other communities broke through the 5% market share level.
Andalusian provinces enjoy
The performance of individual communities also translated into the achievements of the provinces within them. Across Spain, 11 provinces recorded quarterly increases. The provinces that registered the highest number of property sales in Q2 2023 are: Madrid (18,895), Barcelona (15,628), Alicante (12,622), Valencia (9,829), Málaga (8,931), Seville (5,648) and Murcia (5,195).
In total, the top ten of the list of Spanish provinces with the most transactions were the three located in Andalusia. In addition to the aforementioned Malaga and Seville, it is also worth looking at the results of Cadiz (3,800 transactions). Together, these three provinces are responsible for more than 14,500 transactions and account for nearly 10% of the entire Spanish property market.
The strength and attractiveness of the Andalusian property market is also confirmed by further data. Well, looking at the results achieved by the individual autonomous communities and their constituent provinces, the performance of Málaga (where the Costa del Sol is located), is better than that of the thirteen autonomies. And according to the editors of International Living, the Costa del Sol is one of the best places to buy property in Europe.
Spanish real estate attracts investors from around the world
The property market in Spain has for many years attracted wide interest from investors, coming from almost every corner of the world. For a long time, their share of the property market has been between 10 and 15%. The British and Germans invariably lead the ranking of foreign investors, but in recent years we have seen significant changes among the nations interested in buying property on the Iberian Peninsula.
According to CNBC, the number of Americans living in Spain increased by 13% between 2019 and 2021, and property sales to Americans increased by as much as 88% between the first half of 2019 and the first half of 2022. If the momentum of interest from US residents continues at the same level of growth, there could be quite a significant reshuffle in the list of nations most likely to buy property in Spain in the coming years. At present, the Americans are ranked 14th in the ranking, overtaken by, among others, the Poles (9th place).
The data therefore clearly show that attractive locations – such as the Costa del Sol, Seville or Malaga – are of interest not only to Europeans, but also to people from other continents, who are attracted to Spain thanks to its reputation as a great place to live.
You can find out more about the interest in Spanish real estate from Polish investors on our blog.
