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).