Brits top the property market in Tenerife.
It’s no secret that the British are important players in Spain’s property market, but it is a shock to see quite how important. The British completely dominate the expat market for homes in Spain, much more so that many thought. This could have implications for the property market, now that the weak pound and other factors have hit the British demand.
Estate agents always realised that British demand led the expat market. In one of the most comprehensive studies of the expat property market in Spain, British demand was estimated at 34% of the expat market in 2001, falling to around 30% in 2008, on a par with the Germans.
Spain’s property register has started publishing figures that breakdown property transactions by nationality, and the British are far and away the biggest buyers.
Property transactions by nationality show that the British were 58% of the European expat market in 2008, with 11,485 new title deeds registered, down from 63% in 2006.
The next biggest group – the Germans – were just 10% of British demand in 2008, with 1,534 properties bought. The Germans, and all other European nationalities combined, only added up to 70% of British demand in 2008. Only Russian demand was rising in 2008, but even that may now change in the light of the economic crisis.
British demand in 2009 is likely to have fallen dramatically, thanks primarily to the weak pound and the economic crisis, but even if British demand falls by significantly more than other expat groups, we expect that British will still be the biggest buyers, and that the market won’t recover fully until they are back in force. However the lack of expats buying clearly means opportunities and bargains for those with cash available. Sales of property to non-residents fell to just 3,691 last year, down 60% on 2007, and 80% on 2006. if correct, these figures suggest that the expat holiday home market imploded in 2008, to almost insignificant niche levels for some of Spain’s most popular coasts, though not Tenerife. There are several good reasons why these figures don’t tell the whole story of British buyers in Spain, but it does give us a good idea of the trend for expat holiday home purchases in Spain, of which the majority are bought by the British.
Several conclusions can be drawn from these figure but the main one is that the market won’t recover fully until the British are back. It’s a pipe dream to hope that the Germans, or Scandinavians, or some other group, are going to step in to shore up the market now the British have gone. I have no doubt that, one day, the British will be back in force. When will that be? Certainly not before the pound recovers, until then those with cash and a keen eye for a bargain may be in a position to make a lot of money in the future!
