Residential tourism is undoubtedly a stalwart of any economy, particularly in Spain, where the market makes a significant contribution to the country’s GDP. One of the bastions of this sector is Costa del Sol real estate, which accounts for 15% of residential tourism in Spain.
Property within the Spanish GDP
The Spanish Association of Developers (Asociación de Promotores y Constructores de España/ APCE) in conjunction with PWC has just released a report on foreign acquisition of real estate. It reveals that these purchases amounted to almost 89,000 homes, valued at €6.4 billion in 2022.
The majority of the properties were on the Mediterranean coastline, principally the Costa del Sol and Costa Blanca, and the islands. The Costa Blanca took the lion’s share, with 41.7% of the foreign market, followed by Tenerife and the Balearic Islands, with 34.9% and 34.3%, respectively.
Share of Costa del Sol real estate
The Costa del Sol stood just behind in fourth place, with a 33.5% market share. This percentage translates to 15% of the total residential tourism in Spain.
New and resale properties
The report analysed new-build and resale homes. Investment for the former amounted to €1.79 billion in 2022, around 15.5% of the total. On the other hand, investment in resale properties came to €4.57 billion.
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Profile of foreign property buyers in Spain
The APCE also found that around 3.7 million foreigners holidayed in Spain and bought a property in 2022. The average stay lasted for 17 days, and April, July, August and October were the most preferred months to visit.
British buyers were the most prevalent, accounting for 11.1% of all foreign purchases. The Germans were not far behind, with a 9.5% share, with French buyers making up 7%.
(Source: APCE/PWC)
Economic impact of foreign purchases
The APCE President, Juan Antonio Gómez-Pintado, emphasised the weight of foreign property purchases in the Spanish economy, a factor he believes has previously been ignored.
He refers to “the multiplying effect” since every euro spent on residential tourism generates €2.34 in Spanish GDP. The sector is therefore three times more important than the textile industry and ahead of pharmaceutical product manufacture.
In addition, residential tourism activity generates around 105,600 jobs in the construction of new property and in other sectors such as leisure. “It also removes seasonality from the job market in those areas with a high concentration,” said Gómez-Pintado.
Spain is a favourite in Europe
The report highlights the preference for Spain for European buyers, many of whom move permanently to their second home in Spain once they retire.
“Spain could become the equivalent of Florida in the US,” said Gómez-Pintado. It also stands well ahead of competitors for residential tourism, such as Turkey or Marocco.
(Sources: APCE/PWC)
