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Spanish property sales see biggest fall in a decade

Property sales in Spain fell by 17.7 percent in 2020 down to 415,000 transactions, the biggest drop since 2011. But not everywhere in Spain has been as badly affected.

Spanish property sales see biggest fall in a decade
Alicante was the province with the highest rate of property sales per inhabitant in Spain in 2020. Photo: armennano/Pixabay

Spain’s National Statistics Institute has confirmed what property experts have been warning: 2020 was a bad year for buying and selling a property in Spain.

The country’s property market had already experienced a drop of 2.4 percent in compraventas (buying and selling properties) in 2019, but nowhere near the 17.7 percent fall seen throughout 2020, the largest drop since 2011.

The annual total of 415,748 property transactions in 2020 was around 90,000 lower than the previous year. The last time property sales were this low in Spain was in 2016 when there were only 405,000 sales carried out.

Although the figures are dramatic, the drop in property purchase agreements of 17.7 percent is not as dramatic as that seen in 2008 when the global financial crisis sent even bigger shockwaves through Spain’s real estate market: a fall of 29 percent in just one year.

Foreigners bought 46,300 properties in Spain in 2020, a 26.5 percent fall compared to 2019's figures.

Britons continued to be the foreign nationals who bought the most properties in Spain with 6,043 purchases (2,715 fewer than in 2019), followed by French nationals (3,777 properties, 1,153 fewer) and Germans (3,589 properties, 885 fewer). 

The reasons for last year’s steep decline in transactions are obvious: economic instability, restrictions on mobility and travel, a full home lockdown from March until May, all caused by a global pandemic which has dissuaded many potential buyers from leaving the safety of their homes and interacting with real estate agents and private sellers.

Even the fact that Spain’s Registros de la Propiedad (Property Registers) remained closed during Spain’s state of emergency – only dealing with the public over the phone and online – has had a huge impact on the number of property transactions that have been completed.

Both new builds and second-hand homes have been equally affected.

According to Spain’s leading property portal Idealista, 2021 will spell a return to normal compraventa values.

Big regional differences

All of Spain’s autonomous communities saw a drop in sales but the regions with the highest rate of properties sold in 2020 were Valencia (1,469 per 100,000 inhabitants), La Rioja (1,306 per 100,000) and Murcia (1,258 per 100,000).

Alicante was the Spanish province with the highest rate of property sales per inhabitant in the whole country, 35 percent of which were bought up by foreigners.

However, it’s generally the regions that are popular with foreign visitors that have seen the biggest drops in sales, even though in Valencia’s case their rate of property sale per inhabitant is still the highest in Spain.

The Balearic Islands (-23.2 percent), the Comunidad Valenciana (-22.1 percent) and the Canary Islands (-21.9 percent) are the property markets which experienced the biggest declines in 2020.

By contrast, the smallest changes to the property market in 2020 were recorded in Extremadura (-6.5 percent ) and Asturias (-9 percent).

In terms of total numbers rather than rates per inhabitant, Andalusia was the Spanish region with the most housing operations last year, with 83,760 purchases, followed by Catalonia (65,064), Valencia (58,745) and Madrid (56,723).

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PROPERTY

REVEALED: The cheapest most in-demand areas in Spain to buy a house

If you're considering making the move and buying property in Spain, but don't fancy purchasing in a rural village in the middle of nowhere, you should know where the cheapest, most in-demand parts of the country are.

REVEALED: The cheapest most in-demand areas in Spain to buy a house

If you’re thinking about relocating, Spain is a fantastic place to do it. Foreigners have been moving to Spain for decades, not only for its fantastic food and weather, along with a laid-back lifestyle, but housing is generally affordable – if you know where to look.

Though the rise in the Euribor has sent interest rates spiking, house prices in Spain are expected to flatten somewhat in 2023 and it could be a good year to find a bargain, depending on your financial situation.

Knowing what type of house you want and where in Spain you want to live is one thing, but knowing the cheapest, yet most in-demand parts of the country could really help you narrow down your search.

Fortunately, Spain’s leading property website Idealista has put together a list of the most ‘in demand’ municipalities of Spain and where you can find the most expensive and, more importantly for the house hunters among us, the cheapest municipalities of Spain to buy property.

It’s based on data from the last quarter of 2022 and is the average price of housing in towns with more than 1,300 sale announcements and costs valued at more than €1,100 per square metre. 

You can find the ten cheapest areas of Spain to buy property by average price below, but it’s worth noting that Idealista did these rankings by average price across the entire municipality, so there are likely individual towns and villages dotted around Spain where prices are significantly lower.

That said, this list gives you a good idea of the areas to look out for.

READ ALSO:  What will happen with property prices in Spain in 2023?

The 10 cheapest municipalities in Spain to buy property 

Santa Pola (Alicante) – Santa Pola, in the Alicante province, is the cheapest most in-demand municipality to buy a house, according to Idealista’s rankings. The average price for a house in Santa Pola costs just €151,796, though this may come as a surprise given its prime location in a foreign hotspot on the sought-after Costa Blanca. The main town of Santa Pola itself is a small beachfront community with a population of around 35,000. It also has a large foreign population and is a short drive or bus away from both Alicante and Elche.

Ourense (Galicia) – Next on the list is Ourense in Galicia where the average price is €154,941. The municipality is home to several towns and villages, surrounding the main medium-sized town of Ourense itself in southern Galicia. The town has a population of around 105,000 and is a little over an hour’s drive from both Santiago de Compostela and the coastal city of Pontevedra.

Oviedo (Asturias) – Third on the list is the municipality of Oviedo where you’ll pay an average of €154,968 for a property. Another area in northern Spain, the main city Oviedo itself, which is the capital of Asturias and has a population of 220,000. It sits between Cantabrian mountains and the Bay of Biscay. It’s known for its picturesque medieval old town and impressive architecture. 

Jerez de la Frontera (Cádiz) – Properties cost an average of €155,563 in the municipality of Jerez de la Frontera, or Jerez as it’s commonly referred to. It’s located in the Cádiz province of Andalusia and is a real piece of ‘traditional’ Spain. Jerez city is a decent-sized place with a little over 200,000 people and is known for horses, flamenco dancing and sherry, as well as the Alcázar de Jerez, an 11th-century fortress that harks back to Andalusia’s Moorish past.

READ ALSO: Is it better to buy or rent in Spain right now?

Torrevieja (Alicante) – Another municipality in Alicante and another incredibly popular with foreign homeowners. Properties here go for an average of €155,787. Torrevieja itself has a population of 82,000 and is another coastal town, but also has nature trails and salt plains nearby.

Murcia (Murcia) – Murcia is often overlooked, wedged between Alicante and Andalusia, but you could grab a bargain here with average prices of €157,119. Murcia capital is a bustling city of almost 450,000 people, and is strategically placed for trips to the Costa Blanca, Costa Calida, Costa del Sol, and Costa de Almeria.

Parla (Madrid) – The municipality of Parla lies just 20km south of Madrid and the town of the same name is home to 130,000 residents. It’s a great commuter area for those who work in Getafe or the capital. A house here costs an average of €160,652. 

Salamanca (Castilla y León) – The municipality of Salamanca surrounds the capital of Salamanca in Castilla y León in northwestern Spain. Buying a property in this area costs an average of €162,909. The main city of Salamanca is known for its university, which is the oldest in Spain and dates back to 1218. Understandably, much of Salamanca’s roughly 150,000 residents are students, which gives the town a lively atmosphere.

Burgos (Castilla y León) – Another northwestern Castilla y León municipality, is Burgos has around, where you can buy a house for just €163,164. The city of Burgos has around 180,000 inhabitants and is known for its medieval architecture and grand cathedral. 

Dos Hermanas (Sevilla) – The second most populous municipality in the province of Seville, properties cost an average of €163.274 here. The Andalusian town is just 15km south of Seville, making it great for commuters or those who want plenty of culture nearby. 

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