Spain is attracting a broad range of international house hunters as the flow of global wealth changes course.
Once dominated by the sun-seeking British, the recovering Spanish housing market is now seeing widespread interest from Northern Europe, notably from Germany and Scandinavia. Madrid and Barcelona have caught the eye of Russia and the Middle East, and there is rising demand from Spanish-speaking South America.
Meanwhile in Portugal, international buyers attracted to Lisbon’s historic centre have transformed the residential market in the capital. Many entrants, particularly those from Brazil, South Africa, Russia and Turkey have taken advantage of Portugal’s golden visa programme. For other EU citizens, especially the French, its non-habitual residency scheme is very attractive.
This new-found interest in Iberia is one of three emerging trends in the wider story of the globally mobile buyers who shape prime residential markets around the world. Although the traditional hotspots of London, New York, Hong Kong and Singapore are still among the most invested cities, demand is diversifying.
The international gaze appears to be shifting away from the US such that in the 12 months to March 2018, overseas buyers accounted for 8 per cent of all sales with total activity down 6 per cent from a 2017 peak.
The Chinese were the most active for the sixth consecutive year, spending $30.4 billion in 2018. They still account for 15 per cent of overseas buyers, despite tighter regulations on outbound capital from China, and focus chiefly on California, competing against international buyers from South Korea and Singapore particularly in Los Angeles. In New York, the international base is broader and also includes buyers from Europe, Russia, the Middle East and South America.
And while the US continues to command the attention of Chinese buyers, it is far from the limit of their search for a home away from home. Education and top universities are a strong driver of demand which is why the UK and US are key destinations. Premier world cities have long been the first choice, led by London, New York, Hong Kong, Singapore, LA and San Francisco.
Historically, Australian and Canadian cities were also important, but international demand has softened following increased restrictions in these markets. As the demand base has deepened, Berlin and Frankfurt are on the radar, with investors attracted by lower entry points and secure income streams.
This blog is inspired by a theme in Impacts, Savills global thought leadership publication and research programme. This year is the ‘disruption issue’, looking at how widespread economic, political, demographic and technological upheaval is changing the world of real estate.