What are the best places for foreigners to buy property in Spain? Variations on this question crop up regularly on Google and other search engines. This is hardly surprising given Spain’s reputation as one of the friendliest countries in Europe for real estate investment, be it for permanent or temporary residence, or rental income.

And there is a related question that draws a lot of attention: Citizens of which countries are the most active buyers of Spanish real estate?

Well, we’ve got the answers – complete with detailed breakdowns and fascinating insights – thanks to the latest report released by the authoritative Colegio de Registradores of Spain (the association of registrars).

According to the association’s analysis of the second quarter of 2023, foreign demand for housing “has maintained its intense strength in the home buying market in Spain, in line with the results of the previous years, making it an especially relevant factor to maintain outstanding amounts in sales of housing.” In percentage terms, the second quarter registered an increase of 0.42%, placed it near the 15% mark of all home purchases during that period. The exact number of 14.94% happens to be the second highest quarterly percentage of purchases by foreigners in history, the association says. In other words, on average foreigners bought roughly 15 out of 100 homes sold in all of Spain during the second quarter.  

To be sure, these numbers represent an average for the whole country. But how is it playing out in different parts of the nation? Which provinces or regions attract the most interest from foreigners keen to buy property in Spain?
 
Where do foreigners buy?
The latest report offers some interesting highlights. There were no big surprises in the top two spots. Alicante, the province in Spain’s southeastern coast of Costa Blanca, took the first place: purchases of its real estate by foreigners during the quarter accounted for 44.67%.  Santa Cruz de Tenerife on the Canary Islands came in second with 38%.

It was the change in the third place, however, that prompted some observers to speak about an important realignment and a notable trend.   

“This year Malaga has overtaken the Balearic Islands in attracting foreign investment for real estate, which is a real milestone, as the property market on the islands has had more international presence than that of the Costa del Sol, every year since 2018,” wrote a popular English-language newspaper Sur, which focuses on the coverage of the Malaga province, the southernmost region of Spain.

Indeed, according to the Association’s most recent data, international buyers accounted for 32% of property sales in the province of Malaga, which encompasses the famous Costa del Sol. This stretch of beautiful coastal towns has thus overtaken the archipelago of Balearic Islands, which includes the popular vacation spots of Mallorca and Ibiza, where the percentage of foreign buyers slipped to 30.38%. This made Malaga the third leading province in Spain when it comes to foreigners buying homes.

But let’s take a look at the actual number of transactions. The registrars’ report shows that of the 8,931 properties sold in the Malaga province between April and June 2023, nearly a third (2,860) were bought by non-Spaniards. Demonstrating the growing popularity of Malaga the province is among Spain’s top five areas in terms of the total number of property transactions by foreigners, behind only Madrid, Barcelona, Alicante and Valencia.

International buyers: Where do they hail from?  
Historically, British citizens have been the most active nationality in the Spanish property market, peaking at almost 25.0% in 2015, according to Inmo Investments, an Alicante-based real estate company.

But British buyers have declined in number over the past eight years, barely exceeding a 10.0% market share in four of the last ten recorded quarters.

The second-quarter data released by Colegio de Registradores confirms this trend. Among the top three nationalities to buy property in Spain, the UK was in first place with 8.80%, followed by Germany (7.25%) and France (6.56%). There are also some interesting tidbits about regional preferences: the British, for instance, tend to gravitate toward Malaga, where’s in the Balearic Islands there are more Germans.

What about the Americans?
Well, according to the Association’s report, buyers from the United States accounted for only 1.35%, which earned them the 15^th place, behind such Western European countries as Italy (5.22%), Belgium (5.09%), the Netherlands (4.61%), Sweden (2.94%) and Ireland (1.66%).  In the second quarter, purchases by the Americans saw a slight drop of 0.33%.  

Why are Americans lagging behind their western European counterparts? Is it, as some suggest, because of the understandable tendency to focus on what’s closest and better known? Mexico, Costa Rica or Panama come to mind, or Florida (despite affordability question marks). Or – if you look across the pond – Portugal, which is widely perceived to be affordable.

Others would argue, however, that Spain, especially its southernmost coast of the Mediterranean, offers no less – and in fact a lot more. They would point to a high standard of living at reasonable prices, rich cultural heritage, an active lifestyle and warm sunny and generally non-humid weather year-round.

Tastes differ, of course, but having a closer look may be worth a try.