Foreign investment in the residential real estate market in Spain between 2007 and 2019

Laura Álvarez-Román, Roberto Blanco and Miguel Garcia-Posada

Economic Bulletin, 2020, issue 2/2020, No 14

Abstract: This article analyses changes in investment by foreigners in the residential real estate market in Spain between 2007 and 2019. Two indicators are used for this purpose: gross purchases by foreigners as a percentage of total transactions and net purchases (purchases less sales) relative to the housing stock. A distinction is made between resident foreigners and non-resident foreigners. Non-resident foreigners who invest in the Spanish real estate market mainly come from high-income European countries, while resident foreigner buyers are mostly from countries from which Spain receives immigration, such as Romania and Morocco. The article also shows how non-resident foreigners concentrated their purchases in the islands and in the Mediterranean coastal provinces, while residents distributed their purchases more evenly throughout Spain. Finally, there is no statistical evidence supporting the hypothesis that investment by non-resident foreigners has in itself contributed significantly to an increase in house prices. However, the high correlation between population growth and the increase in real estate prices suggests that the increase in the foreign population resident in certain provinces, particularly in the islands, appears to have contributed to raising house prices through its effect on the demand for property.

Keywords: foreign investment; real estate market; regional analysis; house prices (search for similar items in EconPapers)
JEL-codes: R30 R31 (search for similar items in EconPapers)
Date: 2020
Note: Analytical Articles
References: Add references at CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
https://www.bde.es/f/webbde/SES/Secciones/Publicac ... es/be2002-art14e.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bde:journl:y:2020:i:06:d:aa:n:14

Access Statistics for this article

More articles in Economic Bulletin from Banco de España Contact information at EDIRC.
Bibliographic data for series maintained by Ángel Rodríguez. Electronic Dissemination of Information Unit. Research Department. Banco de España ().