International buyers continue to be drawn to Spain’s coastal destinations in increasing numbers, according to the latest figures from Lucas Fox.
The agency, which lists luxury properties for sale and rent across mainland Spain, as well as the Balearic Islands, Andorra and Portugal, said a rising number of mid to high-end foreign buyers are being attracted to the Iberian peninsula as the second home market goes from strength to strength.
Lucas Fox’s latest market reports show that the proportion of buyers in the most desirable coastal regions – the Costa Brava, Costa del Sol, Sitges and Ibiza – rose by just over 51% during 2018. Meanwhile, the value of sales in these areas also went up by 88%.
The vast majority of buyers were foreign (86%), hailing mainly from France, Scandinavia and, despite the ongoing uncertainty surrounding Brexit, the UK.
Tom Maidment, partner at Lucas Fox, said: “The increase in sales volume in the Costa Brava in 2018 compared with 2017 was much greater than anticipated. Whilst some other regions have seen a drop in sales volume in 2018, the Costa Brava seems to have bucked the trend and is attracting a very specific profile of buyer – the wealthy second home lifestyle investor.”
He added that international buyers are seeking second homes, predominantly for peak summer use, with greatest demand in the area of coastline around Begur and Palafrugell.
“The majority are looking for family villas with sea views and private pools, ideally within walking distance of the nearest village or beach,” he went on.
According to Maidment, the current level of sales activity is expected to continue in 2019. “This first quarter has started very positively so as long as the quality and supply of property – both new build and resale – can satisfy demand there is no reason why the market shouldn't continue along this positive trend in 2019.”
As well as a rise in the number of buyers, the average price of a home sold by Lucas Fox in the above coastal areas also went up year-on-year – rising from €951,253 in 2017 to €1,181,724 in 2018, an increase of just over 24%.
These trends are broadly reflected, too, in the official figures from Spain’s National Institute of Statistics (INE).
For example, in Málaga Province (which includes the Costa del Sol) the volume of sales rose by 5% on 2017, averaging just over 2,700 transactions per month. Additionally, the number of sales of new homes increased – up by 7%. It represented 19% of the total number of sales in 2018, a slightly higher number (18%) than in 2017.
Elsewhere, transaction numbers in Girona Province (which includes the Costa Brava) rose by 6% on 2017, averaging 918 sales per month. New home sales soared in this coveted part of Catalonia, up by 17% on the previous year’s figures.
The Balearic Islands, by contrast, saw a small fall in sales transactions after years of steady growth, down by 3% on 2017, averaging 1,286 sales per month. The number of sales transactions of new homes remained steady when compared with the same period in 2017, down by 0.9%.
“Ibiza had a positive first half of the year with many German, French and Danish buyers finalising property transactions,” Rod Jamieson, managing director of Lucas Fox, commented. “There was a slight dip in the last quarter but so far in 2019 we are seeing a number of deals finalised along with some slight price corrections, which we believe will result in more transactions during 2019.”
Overall, he said, the outlook is very encouraging. “There are a number of New Development projects underway that should come onto the market during the year that will bring a supply of properties in the mid and prime markets, giving the advantage of being able to buy guaranteed high quality properties without legal issues.”
Across the Lucas Fox group, turnover increased by 13.5% during 2018 compared to 2017, while the value of its sales rose by 8%. Lucas Fox’s prime sales (for transactions over €900,000) increased by 28% year-on-year, principally due to the strong performance of the company’s coastal offices.
In our last edition, Mark Burns of property investment firm Hopwood House asked if Spain’s property market is set to heat up in 2019. He argued that it continues to recover from the post-financial crisis lows of 2008 and is a market in which British buyers continue to be active, despite Britain’s impending withdrawal from the EU.