Article written by Alfredo Millá of

Many people have questions as to how exactly Spanish property market is doing and whether it is the right time to buy a second home in this country or not.

I will try to shed light on this matter from two different points of view, from the foreign demand side and from the domestic issues view. In saying this, I am by no means trying to foster sales or to put a stop to them; the home-buying decision should be made based on the circumstances depending on each person.

Regarding the foreign demand, Spain has not regained its pre-recession volume of sales yet, since the British market demand has not fully been recovered. The number of home purchases amounted to 23,006 dwellings in 2006 and to 5,541 in 2013, nearly 5 times less than in 2006. By analysing the data provided by the Official College of Property and Mercantile Registers of Spain annual directories (the most reliable source from my point of view) the number of properties sold to people from foreign countries have notably been higher than in 2006 – that is, the last year before the recession broke-, with the exception of Germans and the Dutch where the figures remain similar. In regards to all other nationalities, the number of purchases have not only increased but boosted greatly. In the case of Russia and Belgium the number of buyers has been tripled and for the Nordic countries has been quintupled.

First conclusion: the Spanish housing market would be more buoyant than before the recession, if it wasn’t for the tough time the UK market is having, which is actually the driving force of the economic growth of the sector- it achieved 38% share of the foreign market in Spain.

In regards to the current house market panorama in Spain, there are two main factors acting as the central theme of analysis: the relatively limited supply which may be interesting for foreign people and the lack of credits for developers in Spain.

It is somehow paradoxical to claim that there is a shortage of supply in Spain after hearing discussions about the significant number of empty dwellings… There are indeed several properties which have been uninhabited for years, some of them are located in an area with few opportunities to have a good market acceptation in current times. Those properties were built when it is was thought that anything could be sold. All in all, even if the prices of these dwellings have dropped up to 80% of their original price, they are not sold. There are many other factors interfering in the purchasing process but I will tell on that on other post. The key issue is that the supply has been narrowed, and what it is good now, it is a good opportunity.

All in all, despite the fact that the Real Estate crisis has clearly had a serious impact in Spain, if it was not for the contraction in demand on the British market and the supply reduction, the Spanish housing market would be even better than before the recession period, since the other markets are experiencing an exceptional growth. The British market is growing back after the sharp decline in GDP over a period of 5 years and a later stagnation. The ratio pound / Euro is better than 7 years ago. The interesting offer will remain low in the next couple of years. If the demand increases and there is a low supply, just decide for yourself what might happen.

Alfredo Millá is CEO of, member of the Board of Directors of RICS Spain and Chairman of its Property Professional Group. @MillAlfredo