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Foreign investment in Spain grows by 13.4%

Spain's property market is still enjoying a very positive trend after several years of experiencing a decline or sluggishness. According to the data provided by the General Council of Notaries, foreign investment shot up by 13.4% during the first half of 2017. This means that foreign buyers purchased 50,087 homes in the first half of the year, which was a historical record (this data has been assessed since 2007, at the time of real estate boom). Foreign capital investment has as a result increased its presence in Spain.

The increase in international investment has meant that 19.4% of all purchases and sales registered in Spain's real estate market between January and June were carried out by foreign investors. But which nationalities have shown more interest in buying real estate in our country? Once again, the British (13.9% of the total) have been the main investors during the first six months of the year. Also noteworthy are the French (8.8%), German (8.2%), Italian (7.7%) and Romanian buyers (6.9%). As these figures show, the predominance of Europeans remains remarkably high, despite the slight decline from Nordic investors.
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Another fact to take into account is the top destination for investing in our country. For the first time in a long time, inner region of Spain has taken the lead in attracting foreign capital. The most striking case is that of La Rioja, which has seen residential investment by foreigners soar by 74.8%. The Autonomous Community of Navarre (43.8%) and Castile and León (39%) also saw international investment grow with special intensity. On the contrary, the regions that experienced lower growth were some of the most popular tourist regions, such as Andalusia (5.4%) and the Balearic Islands (5.3%).

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With regard to prices per square metre, these increased by 2.9% in the first half of the year. It is, however, worth clarifying that prices of holiday homes had a greater increase (4.5%) than in permanent or main residences (2.9%). However, there were also regions that totally escaped the general trend and even registered a fall in foreign investment. Interestingly, the communities with worse records are also located in the inner peninsula. The most negative data belongs to Extremadura, where foreign investment has fallen by 25.4% compared to the previous year. Having said that, the result is quite frankly positive.

The figures that we are left with this year seem to indicate a clearly upward trend in the real estate sector. In fact, if we take a look at the significant gap with respect to the data prior to the last major crisis, the growth margin presented by Spain's real estate market is still outstanding.

Engel & Völkers

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08017 Barcelona Spain

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