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After the release of the most recent numbers by the Spanish General Council of Notaries, a DEEP unease is beginning to spread along Spain’s coast regions.
It is shocking to see that the number of foreign buyers in some Mediterranean markets has surpassed that of Spanish buyers.
In the first nine month of 2024, foreigners made up 53% of home purchases in Alicante. Locals are now a minority on their own housing market.
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In the Costa Blanca towns Javea and Altea as well as Torrevieja, Benidorm and Benidorm estate agents do not bother to create listings in Spanish.
The majority of properties are now being advertised in English, Dutch and German even before local buyers have made enquiries.
According to estate agents, prices are set in line with the income of Northern Europeans.
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In these markets, asking prices are commonly pegged not to Spanish wages, but to incomes earned in London, Amsterdam or Düsseldorf.
The Madrid daily El Diario said in a report published recently: “Prices don’t reflect what an average worker earns.”
In Malaga, the events follow a similar trajectory.
The Golden Triangle (Marbella, Benahavis, Estepona) is the place where foreigners are most likely to buy a home.
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New-build luxury developments now routinely exceed €5,200 per square metre, and in some beachfront schemes the price per metre pushes beyond €5,500, according to data from Property Partners.
High-end homes in these markets are bought by British and American buyers as well as Nordic, Middle Eastern or Eastern Europeans. Some of them relocate to the area for lifestyle reasons, remote work, or tax residency.
In these markets, homes sell quickly. In some ultra-prime pockets, one in every five listings now sells in under 10 days — a pace that would have been unthinkable a decade ago.
Foreign demand is not just limited to Alicante and Costa del Sol.
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Tenerife follows Alicante with 45.2% of foreign buyers.
Malaga and Murcia are also showing high levels, at 31%.
This pattern reflects a housing market in coastal areas that is increasingly shaped more by purchasing power from outside than locally.
Across Spain, 95,114 homes were purchased by foreign buyers between January and September 2024, according to the Ministry of Housing – 18.05% of the total.
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Non-residents bought 44,675 of these properties, including 49,527 by residents who already live in Spain.
Local residents are being increasingly boxed in.
For several years now, Spain has experienced a steady increase in the level of unrest.
The editorial in La Opinion de Malaga recently warned that “young people here can’t compete with these buyers.”
Housing analysts note that it is not just foreigners who are buying houses, but also the amount of properties bought for investment, short-term holiday rentals or second homes. This takes away property from the long-term market.
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Around 40% of the foreign buyers are not even residents in Spain and they buy for investment or second homes.
This latter category is the one that has the greatest impact on the availability of housing for locals.
As El País observed in a recent report on Malaga’s coastal housing market: “The economy appears to be booming thanks to these influxes, but the local population is actually living worse than before.”
The trade union CCOO has warned of ‘a gradual displacement of local residents’ in coastal zones affected by foreign-led housing price inflation.
That has led to steep rises in rents and fewer available homes for workers in tourism, services and public sector jobs, forcing children to live with their parents – sometimes until the latter die.
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Property analysts stress that the issue is not foreigners buying homes per se – but the imbalance between local wages and imported purchasing power, coupled with the conversion of homes into holiday lets and speculative assets.
Costa Blanca & Costa del Sol benchmark their pricing against earnings abroad.
The national picture is not as extreme, but it still shows a trend upward.
In Spain, one in five of the home sales involve foreign buyers. The share has steadily risen since 2013.
On the east and the south coasts the proportion has risen to almost one-half, which has reshaped entire local markets.
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There are few policy responses.
Spain continues its promotion of the Spanish property market overseas, while regions, such as Costa Blanca or Costa del Sol, depend heavily on international demand to sustain construction and tourism, as well municipal finances.
The ability of citizens to get politicians’ attention will determine whether these areas stay as permanent communities or move further towards seasonal enclaves.
With municipal elections not for another two years, local town halls might not be incentivised to give up the economic strategy that has, in large part, made Spain increasingly rich – at least on paper.
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