Three quarters of foreign Spanish property buyers choose resales
Added: (Tue Dec 11 2007)
Pressbox (Press Release) -
According to the Spanish Ministry of Housing (MVIV) data, now also available in English on the award winning portal, Kyero.com, of the 104,168 property transactions carried out in Spain by foreign residents in 2006, 77,416 (74.3%) were for resales and only 26,843 (25.8%) were new builds.
With over 955,000 property transactions being made in total in Spain in 2006, the proportion carried out by foreign buyers represents just 10.9%. Data for Q1 2007 reveals that despite 618 fewer transactions being undertaken by foreign residents compared to Q1 2006, three quarters of buyers are still choosing resale properties over new build.
But why?
Looking at the national average sales prices of property in Spain, in Q1 2007 resales were 4% lower compared to new build (€178,793 and €186,202 respectively); this is somewhat unusual as commonly new builds are up to 10% cheaper than resale properties. Martin Dell, MD of Kyero.com, suggests that “as with all data there can be anomalies. The MVIV figures take the official sales price of a property but it does not account for any cash which passes directly from buyer to seller. The transfer of ‘black money’ has been common practice in Spain especially when purchasing resale property and although now on the decrease, can skew price trends considerably.”
Aside from the price factor, Martin Dell, MD of Kyero.com, believes that the majority of foreign buyers are still selecting lifestyle properties as opposed to pure investments. He comments, “In my experience most foreign purchasers, especially the British, still view Spain as a holiday home destination. Increasingly they are looking for character properties in towns and villages that reflect traditional Spain; country houses and fincas frequently top our Hot Properties list.”
Regarding location, the MVIV data revealed that the Valencia region accounted for 27.1% of transactions by foreign purchasers in 2006 with Catalunya, in which the provinces of Barcelona and Girona are situated, accounting for 19.4%, Madrid 12.6%, Andalucia, home to the Costa del Sol, 11.8% and Murcia 7.1%.
Visit Kyero.com to view over 90,000 resale and new build properties across Spain. MVIV data and the Kyero.com Spanish House Price Index can be freely downloaded at http://prices.kyero.com
Notes on Ministry of Housing data
Original data is freely available to download from the web site of the Ministerio de Vivienda. No changes have been made to the source information other than for clarity of presentation and translation into English.
New construction is defined as properties less than 2 years old. These figures *might* include property purchased off plan and 'flipped' or resold in the same period and while the property is still technically 'new'
Resales are defined as any property older than two years - again, this may not strictly correlate to a property having been sold a number of times
Except where specifically mentioned, all figures exclude sales of subsidised or social housing.
Sales of urban and rural land are excluded.
Sales to 'foreigners' are categorised as resident, non-resident and 'other'. For the sake of clarity, only figures for foreign residents in Spain are presented here as they account for the vast majority of cases.
Actual prices are likely to be unreliable due to the fact that some of the sales price passes from buyer to seller 'under the table'. This amount is never notarised and therefore cannot feature in the MVIV figures.
As the Spanish government increases their efforts to stamp-out these 'black money' practices, house prices might 'appear' to be increasing when, in fact, a proportion of that increase must be attributed to a larger proportion of the actual sales value being notarised.
Kyero.com Spanish House Price Index
To help UK buyers to understand the Spanish property market, Kyero.com has been recording actual asking prices of 90,000 properties for sale in Spain from 600 estate agents since 2003.
The Kyero.com Spanish House Price Index is updated every month and is available as a free download from www.prices.kyero.com.
This information is automatically groomed to make it more reliable and practical by removing unusual properties from the calculations. What's more, any analysis of asking prices will naturally predict actual sales values by 3-6 months.