Driven by demand from international buyers, Spain’s prime real estate markets are poised to gain momentum during 2017 and beyond, as the country’s economy steadily recovers, according to a luxury real estate agency in Spain.
In its annual market report released Monday, Lucas Fox International Properties said that its sales across all regions were up 31% year-over-year in 2016, the biggest increase in more than a decade.
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International buyers were the main drivers in the luxury segment, representing 65% of all Lucas Fox sales during 2016, according to the report. The British made up the biggest portion of foreign buyers (11%), followed by buyers from the Middle East (8%), Scandinavia (7%), France (6%) and the U.S. (5%).
Many European buyers turned away from London following the Brexit vote, looking instead at Madrid and Barcelona. Other non-European buyers, including those from the United States, Middle East and Asia, are increasingly taking advantage of the country’s Golden Visa program, which grants residency for certain property investors, according to the report.
At a macro level, Spain’s residential sales increased 14% to 403,866 in 2016, according to the report, citing data from the National Institute of Statistics.
Spain’s residential properties have become more attractive as the European country shakes off the Great Recession triggered by the debt crisis in 2008. Last year, Spain’s economy grew 3.2%, becoming one of the strongest performers of the Eurozone’s four big economies, according to Lucas Fox, citing figures from International Monetary Fund.
In broader terms, the Spanish economy has recovered around 80% of what it lost during the years of the crisis, according to Spain’s National Institute of Statistics.
Spain’s economic recovery, in part, is attributable to its booming tourism. The country welcomed a record 75 million visitors in 2016. They spent an average of €800 (US$848) during their stay, according to the report.
"The growth of the economy, coupled with low financing costs, good potential for profitability from rents, and capital growth will continue to drive sales throughout 2017," Alexander Vaughan, co-founder of Lucas Fox, said in the report.