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Should Americans rush to buy a Spanish home while the dollar is strong?

The Local Spain
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Should Americans rush to buy a Spanish home while the dollar is strong?
Should Americans rush to buy property in Spain? Photo: AXP Photography / Unsplash

The strength of the US dollar this year has meant that many more Americans have been buying up properties in Spain, but will the situation stay the same in 2023?


We recently reported on how Spain is the second-favourite country for Americans to move to, just behind Canada.

Americans have been flocking to Europe in 2022 in search of a more affordable life and cheaper homes, with the help of a powerful dollar against the euro.

So many of our readers across the pond may now be considering starting a new life in Spain in 2023, or perhaps buying a property to spend extended periods of time in the country.

READ ALSO: Why Spain is second favourite country for Americans to move to


The strength of the US dollar compared with the euro has meant that US nationals have been able to buy houses in Spain that work out to be 18 percent cheaper for them in 2022 than the previous year, according to property giant Idealista.

Currently, €1 is worth $1.05, meaning that the two currencies are almost on par, and therefore Americans are able to afford a lot more in Europe than they had done previously.

And it influences more than just property.

For example, even though the amount of euros that Americans need to prove they have in savings to get Spain's non-lucrative residency visa in 2023 is higher than in 2022, the strong exchange rate means it works out to be less for them. 

READ ALSO: How much money do Americans need to become residents in Spain in 2023?

Berkshire Hathaway Home Services, a subsidiary of Warren Buffett's real estate company in Spain, has recently opened a new office in Málaga, with the aim of meeting the demand for luxury properties in the area.

However, the demand is not limited only to the Costa del Sol. In the rest of Spain, there is increasing interest from foreigners for high-end properties.

MAP: Where do US nationals live in Spain?

According to Bruno Rabassa, CEO of Berkshire Hathaway Home Services, many more Americans are considering purchasing property in Spain because of the increase in flight connections between the two countries.

For example, a flight route between New York and Palma de Mallorca in June of 2022 led to an increase of 425 percent in American clients interested in property there.

“The residential and luxury real estate market in Spain is experiencing strong demand,” Rabassa reiterates.



Should Americans rush to buy a Spanish home before a potential drop in the US dollar?

"These are economically unstable times, particularly in Europe – we have just gone through a global pandemic, the economy has slowed down, there are very high levels of inflation and we are facing an energy crisis, leading to an unstable real estate market and fewer new constructions," admits Bruno Rabassa, CEO of Berkshire Hathaway Home Services.


According to analysts at American bank Wells Fargo, the US dollar will remain strong early next year, but it will begin to weaken in mid-2023.

“We expect this theme of US dollar strength to persist in early 2023 as US economic trends remain resilient relative to other major developed economies, and as the Federal Reserve pursues a more aggressive pace of monetary tightening compared to other major central banks.

"With the Fed set to deliver rate hikes through March 2023, and most other central banks seen finishing their tightening cycles at a similar time, we believe the US Dollar index could gain a further 4-5 percent by the end of Q1-2023,” they stated.

“But as the Fed ends its tightening cycle and U.S. economic trends worsen, we believe the greenback will enter a period of cyclical depreciation and weaken against most foreign currencies for the remainder of next year,” they added.

This means that there is still time for Americans to buy property in Spain, but it may only remain economically advantageous for them up until the middle of 2023. American property hunters should factor in that the amount of time it takes for property purchases in Spain can be around three months.

Others are more optimistic about the USD's ongoing strength against the euro. Dutch multinational bank ING recently projecting €1 to trade as follows:

  • $0.98 throughout Q4 2022
  • $0.98 by July 2023
  • $1.00 by January 2024
  • $1.10 by September 2024

Bruno Rabassa of Berkshire Hathaway believes that property will continue to be an asset because rent is a rising value in Spain.  

According to the American multinational conglomerate, US clients can apply for a mortgage loan in Spain to help with property purchases and, although the interest rates are now higher in Spain than they once were, they are still much cheaper than in the United States.

READ ALSO: Seven big differences between buying a property in Spain and the US



Where are Americans buying in Spain?

Rabassa points out an interesting trend that has happened this year with more Americans buying properties in different regions of the country.

"Until recently they bought in the cities of Madrid and Barcelona, ​​hardly any in other coastal resorts or on island areas," he said.

During the Covid-19 pandemic, there was a spike in interest from the US in properties located in Spain's less populated interior, where homes are considerably cheaper on average.

But US property hunters can now clearly afford to buy more expensive properties across Spain and are generally broadening their horizons. 

United Airlines launched new flights to Tenerife in the Canary Islands and Mallorca in the Balearics from New York, and the airline will kickstart a new route linking Málaga to the Big Apple in 2023.

Regardless of whether the US dollar stays as strong against the euro in 202, what's clear is that there's an increased demand for Spanish properties by Americans buyers looking to buy in tourist resort areas, which are usually favoured by European buyers, particularly from northern Europe and the UK.



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