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Zetios Properties LLC: Spanish Property Trends for 2024

·2 mins

According to a report from Zetios Properties LLC, the total investment in Spanish residential real estate for the year 2023 amounted to an estimated 15.2 billion euros. This level of investment equates to the record high of 16.077 billion euros achieved three years ago. Although there was a slight reduction in the number of home sales transactions in the last quarter of 2023 compared to the same timeframe in 2022, the report suggests that a significant housing crisis leading to financial distress is unlikely to materialize.

Spain continues to be a magnet for foreign investment in real estate. Predictions for 2024 indicate a significant portion of investment will flow into the “build to rent” sector, recognized for its substantial profitability, alongside investments in luxury and single-family homes. The latter category saw a rise in demand during the Covid-19 pandemic, as the need for single-family homes with accompanying land became more pronounced, a trend that remains strong.

The preference of foreign investors tends to lean towards the Mediterranean coastal provinces, as well as the Canary and Balearic Islands. In 2022, these areas accounted for more than 80% of the total real estate transactions involving foreign investors. Spaniards are also drawn to these regions, viewing them as viable options for investment properties, second homes, or retirement residences.

Statistics from the National Institute of Statistics (INE) reveal that Alicante was the province with the highest foreign purchase activity, representing 19.4% of the total. It was followed by Malaga with 12.6%, Barcelona with 8%, the Autonomous Community of Madrid with 7.1%, the Balearic Islands with 6.8%, Valencia with 5.9%, and Murcia with 5.4%.

The leading nationalities among foreign investors were the British (9.3%), Germans (8%), and the French (6.2%), with a pronounced interest in properties located on the Costa del Sol and Costa Brava. Furthermore, the report notes a significant increase in real estate market activity among Dutch, Norwegian, Irish, and Danish investors in 2023.

Despite expectations of a downturn in housing demand due to inflation and rising mortgage costs, the impact is projected to be more pronounced on the number of sales transactions rather than on prices, particularly in provincial capitals and seaside cities. Transaction numbers are expected not to exceed 500,000, down from 630,000 in 2023. However, the valuation of property in Spain as a preferred investment continues, suggesting a sustained trend of investing in this sector.

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