The property market in the province of Alicante continues to be the subject of statistics showing it to be uniquely different from the mainstream Spanish market thanks to the stimulus provided by foreign buyers: the final quarter figures issued by the Ministry of Development this week for 2013 confirm that more homes were bought by foreigners in this province during the whole of 2013 than in any of the other forty-nine in Spain.
In all 13,786 properties were bought by non-Spaniards during the year, the majority of the purchasers (12,217) being residents here. This total sets all kinds of records: 15% higher than in 2012, it is the highest figure ever reached in the Costa Blanca, but more than that it also accounts for over a quarter (27.88%) of all homes purchased by non-Spaniards in the whole of Spain.
Perhaps even more significantly, over half of all property purchases in Alicante last year (51.48%) were made by non-Spaniards. This seems to indicate that now more than ever the Costa Blanca is Spain’s preferred location for residential tourists, ahead of the province of Málaga, where the number of purchases made by foreigners was 7,038. This is only half the total in Alicante, although it represents over 37% of all the province’s property sales.
Some of the credit for this interest from foreign buyers will be claimed by politicians and tourist boards who have been promoting the virtues of the Costa Blanca, and rightly so, but for the most part it is down to sheer market forces. Prices in the Mediterranean have fallen so far that foreign residents, who tend to have disposable capital and therefore don’t need so much help through bank mortgages, can take advantage of the bargains on offer. Repossessions being sold by Banco Sabadell, for example, reportedly carry prices which have been cut by an average of 48%, and cash buyers from abroad are able to take the plunge far more easily than locals who need mortgages to climb onto the property ladder.
This they are doing, and while the results are particularly eye-catching in Alicante the same is happening in other areas of Spain where residential tourism is big business.
Just south of Alicante In the Region of Murcia over a fifth (21.25%) of all property purchases were made by non-Spaniards last year, and further along the coast in Almería the equivalent proportion was over 19%. In the Balearics and the Canaries, meanwhile, the percentage was as high as 36%, as was the case in Girona in the north of Catalunya.
In none of these main areas of foreign interest, though, was the number of non-resident purchasers significant, which seems to indicate that the foreigners most active in the market are those who already live here rather than those who have been captured by government promotion activities abroad.
In addition, it shows that the government’s attempt to stimulate sales to foreigners by offering residence permits to anyone investing over half a million euros is not yet bearing fruit: possibly one of the flaws in the plan is that in the current climate of reduced prices not many properties are sold for half a million euros. However, the next few months may well see an increase in the numbers of those taking up this offer.
In the fourth quarter of 2013 alone 3,442 properties were sold in Alicante to foreigners resident in Spain and a further 392 to non-residents, making it the most successful of the four three-monthly periods in this respect. The annual increase of sales to foreigners in the province contrasts with a nationwide rise of just 0.1%.
One downside of this phenomenon is that the Spanish property market as a whole may be becoming over-reliant on purchasers from abroad. Last year one in six of the 300,349 properties sold in Spain were bought by foreigners, and although this is stimulating the market in some areas it indicates no improvement in the ability of young native Spaniards to purchase their own homes. The prices are still too high for many to afford, especially those who are unemployed, and are likely to be maintained by this increased interest from foreign purchasers.
If this is the case, the long-term problem will be even more keenly felt in those areas where most foreigners are buying, and the province of Alicante may one day find that Spaniards are forced to leave the area in order to find affordable properties.
During 2013, 47,901 properties were sold in the whole of the Valencia region, a decline of -10.3% on the 2012 total of 53,380
Image: Property in Orihuela Costa. Copyright Valencia Today
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