Deep-pocketed U.S. citizens paid the highest prices for Spanish property of all foreign buyers last year, while making the most purchases in some central and northern regions, data showed on Thursday, exacerbating a housing crisis in the country.
Unlike northern Europeans who have long sought refuge from harsher climates on Spain's sunny beaches and plains, U.S. investors only started arriving en masse recently, some driven by business considerations such as a strong dollar, others by concerns over U.S. President Donald Trump's populist policies.
The number of property deals involving Americans was more than four times higher than five years ago, during Trump's first term, with their share doubling to 2% of the total 139,102 transactions by non-resident foreigners, based on statistics on property deals from Spain's General Council of Notaries, which oversees property registries.
That was still well behind Britons, who remain the biggest foreign buyers although their share of house purchases dropped to 8.5% from 12% over the same period. The average price they paid per square metre was nearly 30% lower than the 3,390 euros paid by Americans. Foreign buyers, who account for 20% of all residential purchases in Spain, on average paid 2,362 euros per square metre, while Spanish nationals paid 1,713 euros in the second half of the year.
While Spanish house prices are generally lower than in wealthier central and northern Europe, they jumped 11% last year, the second-biggest rise in the European Union after neighbouring Portugal, Eurostat data showed. With a housing crisis already sparking protests against rising rents and property prices, the government has threatened to impose a tax of up to 100% on property purchases for non-EU buyers, although experts doubt it will stem price increases originating from a low supply of housing.
Spain has already scrapped its so-called "golden visa" scheme granting residency rights to foreigners making large property investments. Many Americans have taken advantage of the scheme in recent years but its demise is unlikely to stop them buying as long as they consider the prices attractive. "Americans see that Madrid capital property prices still have a significant growth potential versus other European cities," said Luis Valdes, director of Residential Sales Advisory at Colliers, citing Spain's southern Costa del Sol as another example.
Francisco Cerezo, partner at U.S. law firm DLA Piper who does cross-border business in the region, said U.S. citizens of Latin American heritage were particularly keen on Spanish property, attracted by the familiar language and culture, as well as prices and climate. "In that sense, it does evoke parallels to the investment patterns we've seen in Florida over the years," he said.
“Mallorca is clearly overwhelmingly popular. Not only is it in the Mediterranean, which is a brand of global importance, it’s also extremely well positioned strategically and is probably in terms of infrastructure the most sound and well connected.
“Property in Mallorca, the island’s infrastructure and few issues mean the island is becoming an increasingly sought after venue for more and more nationalities. And we’re not just talking about Americans, we’re talking about extremely aspirational people from around the world. The total picture here is extremely positive, all that has happened here, and that’s being seen on the international market.
“If you want to have a place in the south, in the Mediterranean, to have this infrastructure, hospitals, logistics, safety, education, we’ve got the Rafa Nadal Academy, for example, which has an international reputation, and the airport, then Mallorca is second to none. The island has also become a hub for private jets just as it has for charter yachts. You’ll find in both cases, many are coming out of Mallorca to go to places to pick up their guests, if they’re not boarding here on the island to start with,” Maximilian Stamm, Managing Director and Head of Private Office for Engel & Völkers who is based in London, told the Bulletin two years ago.
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WildwoodThey wouldn't be leaving if they wanted hell. Or bringing it with them.
Morgan WilliamsThey are bringing Hell with them? Oh noes...........
tranq tranquerAnd who provides employment for these services? And who sells and profits from that land? Should we all go back to farming potatoes and riding horses? Mallorcans don't have any other eggs in their basket. It's a tourist or 2nd home destination with nothing else to offer. This is Spain! The land of waiters all content on working 6 months a year making 1400 EUR and collecting from the government the rest of the year.
Eric07809No definitely not the cause of the housing shortage because they are building so many bloody houses. It is very rare now to be able to look across a vista and not see any houses. The odd brown stone farm house settled into the landscape for a couple of hundred years is pleasing normality. These modern monstrosities, often taking up good farmland, built right in the middle of the plot so no more farming there. Here a house, there a house, everywhere a bloody house. But not people of course. Oh no, just a month here , a month there, zero contact with local society. Empty the rest of the time except for the gardeners, pool boys and maintenance men. Welcome to the new Mallorca. Second ( or third) home haven for the mega rich.
Americans (or any foreigner) buying property in Spain is not the cause of the housing shortage so stop spreading absolutely false and unverifiable misinformation. The government's lack of action building or approving social housing and obsession with protecting squatters is what has led to many property owners from taking their properties off the rental market. A wealthy foreigner buying a million euro home that is otherwise way above the price range of local Spanish who average less than 1800 euros per month in salary is not the problem. Salaries in Spain are 30% below the EU average and haven't been adjusted in decades yet the manufactured outrage over luxury properties being too expensive for low income residents is laughable.
Getting the hell out while they can still afford to..