Almost exactly 12 months ago, the UK voted to leave the European Union. In the summer of 2017, negiotiations are underway to begin that process, with all eyes on the discussions and what they will mean for expats abroad, EU citizens in the UK and the pound. With Spain the most popular destination for British expats heading overseas, the Spanish property industry will also be paying attention. One year on, is Brexit impacting British demand for Spanish real estate?

Figures from the Spanish Registrars Association, published in April 2017, suggest that the vote has already had an effect: according to Registrars, British buyers accounted for 19 per cent of foreign demand in 2016, down from 21 per cent.

In 2017, though, demand for Spanish property on TheMoveChannel.com has remained robust. In Q1 2017, the country topped the most searched-for locations, with Malaga the most sought-after hotspot on the entire portal. Malaga’s rise to the number one marked the first time in 18 months that Italy was not at the top of TheMoveChannel.com’s index. In Q2 2017, Almeria replaced Malaga as the number one location, continuing Spain’s reign, while Malaga slipped to fourth place.

The World’s Top Property Hotspots (Q1 2017)

Spain’s dominance of the chart partly reflects its strong international appeal for investors around the world. Indeed, according to Registrars, foreign demand in 2016 accounted for 13.25 per cent of the market, a record high and significantly above the 8.97 per cent recorded in the boom years of 2006. With British demand reportedly declining, the rising foreign interest highlights how resilient Spain’s real estate is in the face of Brexit, with buyers still queuing up to snap up property.

Spain’s property has certainly rarely been so attractive, with all the major indices indicating a climb in house prices this year, as the market recovery continues. According to the National Insitute of Statistics (INE), values rose 5.3 per cent in Q1 2017, while the Tinsa index recorded a price rise of 3.6 per cent in May 2016. With rents also on the up, according to Idealista, the combination of rising rental rates and capital growth, in addition to the pleasant climate, stable Eurozone presence and competitive mortgage products, makes for one of the world’s most promising property markets.

Sales rose by nearly 30 per cent in March, according to the INE, and despite a dip in April, transactions remain 10 per cent higher than a year ago. On TheMoveChannel.com, Spain has been the most popular country on the portal two times in the first five months of 2017, and the second most popular for the other three, behind only America.

“We’ve been seeing a major increase in enquiries for Spanish properties under €50,000”

According to prime agency Lucas Fox, Madrid is perceived as a safe haven among investors from Latin America, as well as India, the UAE, Portugal and france, with prices appealingly at around 19 per cent above their post-crisis low. Foreign investors in Barcelona, meanwhile, are partly fuelled by the country’s Golden Visa scheme for non-EU buyers. US investors taking advantage of the strong dollar have also increased their interest.

In Q1 2017, Spain accounted for 26 of the top 50 hotspots on TheMoveChannel.com, with both Madrid and Barcelona among them. With expat favourite Benidorm and Tenerife in fifth and seventh place respectively, though, the figures indicate a continuing British interest in the country, even if it is one that has reduced slightly, after enquiries and searches have progressed to the final purchase phase.

Almeria’s position at the top of the index also highlights the trend of buyers looking to Spain’s more affordable locations.

Golden Properties, an agency that specialises in Spanish property, emphasises the importance of price as a way for British buyers to offset the pound’s weakness against the euro.

“It is yet to be clear what impact the recent devaluation of the pound will have long term on the Spanish market, especially in places like Costa Del Sol and other holiday destinations but we’ve been seeing a major increase in inquiries for Spanish properties under €50,000 from British investors,” the firm told us at the start of 2017. “That could indicate that investors are still buying but just going for lower prices.”

Mapped: Britain’s Love for Spanish Property

Spain-Brexit-Map-2017

New figures released this week from the ONS provide a picture of where British buyers prefer in Spain. According to the official data, the population of British citizens resident in Spain was 296,600 in 2016. The tourist industry is also thriving, with more than 13 million visits of less than 28 days to Spain in 2016, although there were also a large number of visits to the country from Brits seeing people they know who live there – Spain is currently the third most popular destination in the EU for Brits to visit family and friends.

The coastal provinces of Alicante on the Costa Blanca and Malaga on the Costa del Sol continue to attract the most British citizens, with ever improving air accessibility, a large number of Blue Flag beaches, and affordable homes on the Mediterranean coast. Mallorca has also become a very popular destination, with a high percentage of Britons living on the Balearic island.

Research from TheMoveChannel.com confirms that demand for such Brit-friendly areas remains high: Andalucia and the Valencia Community are the two most popular regions among overseas buyers, accounting for 62 per cent an 18 per cent of demand respectively in the 12 months since the Brexit vote. Murcia, Catalonia and the Balearic Islands complete the top five.

Since the financial crisis, price rises have been strongest in areas driven by foreign demand, with Tinsa’s May growth led by capitals and big cities (6.1 per cent) and the Mediterranean coast (4.7 per cent). The Balearic and Canary Islands have also seen prices rise by 2.9 per cent, slightly below the national average of 3.6 per cent. A year on from the Brexit vote and this trend appears to be continuing, with signs of recovery in places such as Benidorm spreading down the coast to Mazarron and further. Alicante is showing strong signs of recovery, notes Tinsa, as are the Balearics. Almeria, meanwhile, is “finalising its adjustment”, as prices bottom out.

“We have witnessed the marked growth of those of retirement age choosing to relocate”

Another trend that has grown over recent years is the rising number of older British residents moving to Spain: 121,000 British residents in Spain were aged 65 and over in 2016, according to the ONS, more than double the number recorded in 2006.

Marc Pritchard of housebuilder Taylor Wimpey Spain comments: “We have witnessed the marked growth of those of retirement age choosing to relocate. We now receive more the double the number of enquiries from this demographic than we did 10 years ago, a trend which the ONS data also reflects.

“While no one knows quite what the eventual Brexit agreement will look like, it’s clear by the publication of this data that the 300,000 British citizens living in Spain are being considered, as indeed are the 116,000 Spanish citizens living in the UK. And having been operational in Spain since 1958, we at Taylor Wimpey Spain remain at the disposal for any Brits looking to make Spain their home.”

“The negotiations between the UK and the EU are only in their very initial stages, with no clear indication yet of what kind of Brexit deal will be reached. We expect the pound to fluctuate against the euro as each stage of the negotiations unfolds, which may cause some transactions to fluctuate from month to month,” comments Dan Johnson, Director of TheMoveChannel.com. “While Spanish figures show a decline in the number of British buyers in the last year, though, activity on TheMoveChannel.com suggests that UK interest is still there at the early stages of purchasing. Whether buyers are British expats looking to retire or those turning to more affordable hotspots, Brexit is not the end for Britain’s love affair with Spanish property, but rather the beginning of more a budget-conscious relationship.”

For bespoke statistics and data regarding Spanish property, visit TheMoveChannel.com’s press and media centre.

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