British buyers make a return to the Costa del Sol
Sean Woolley from Cloud Nine Spain reports that although they are an estate agent who have had predominantly British buyers over the last 20 years, this year they didn’t have their first British buyer until June 2021. They had no British buyers in July, but since then the Brits have definitely returned, with 59% of their buyers in August being British and all of the buyers in September coming from the UK.
He explains, “We’re going to have a record year, without a shadow of a doubt, with July being the busiest month in 20 years in terms of sales values, and selling more in terms of transactional value in July and August, than we did in the whole of last year. Signs are good for the rest of the year, with average sales values in September being double what it was in August, at 1.4 million Euros.
However, who has been buying has been very different from what we’re used to. From January to May, we’ve had no UK buyers at all in the market and a massive variety in where our buyers have been coming from. In the first quarter, 22 sales transactions were attributed to buyers from 18 different countries. But since August, the Brits are definitely back. As soon as they could travel without too many restrictions, the UK buyers have blown us away and the pent-up demand has been reflected in high sales and very serious buyers.”
Sean says that the first six months of the year saw buyers mainly from Northern Europe and other parts of the world, but he predicts that the second six months will be defined by the UK buyers. He’s seeing the results of unfulfilled demand from the COVID pandemic and a glut of clients wanting to buy a second home in Spain. He’s also noticing a different mindset from buyers, who are looking at life very differently since the pandemic and wanting to get out from the UK into the sunshine.
However, the UK leaving the EU and residency becoming more challenging is a topic which is being discussed by all UK buyers, even if they’re just buying a holiday home to enjoy and generate rental income. Sean explains, “They are looking to the future and the possibility of retiring to their home in Spain and therefore they need to understand their options and residency requirements when they buy the property and in many cases are weighing up between Spain and Portugal for this reason.
British people in the high-net-worth segment need to think about organising their tax affairs, as Spain is not the cheapest place to live. However, several of our clients who were looking at Portugal recently, have actually come back to Spain because although the tax benefits are better in Portugal, the lifestyle isn’t, and they’ve decided that the lifestyle outweighs the tax benefits.”
He recommends doing your homework and speaking to experts about the tax and residency issues early in your search. This will allow you to refine your requirements and have everything in place in time.
Quarter four predictions
According to Sean, historically the more serious buyers come over in the final quarter of the year, so he feels that the market will continue to be strong although it will start to cool down after the summer madness.
“I think that the market will settle down to more realistic levels in terms of volume, but I also think that there’s a new breed of clients on its way, who are looking to make a more permanent or semi-permanent move here.
I can just sense it calming down a little bit in terms of levels of interest and also transactional levels on the ground. However, our conversion rates are double what they normally are. People who are here looking at property are well-researched, know what they want, and they’re determined to do it.”
He predicts that vendors and developers may have to change their attitude to their pricing as the market cools, if they are serious about selling, and this may offer opportunities for buyers. He also sees growth in the off-plan market due to lack of stock in the best areas for high-end properties.
Sean Woolley is the Founder and Director of leading real estate agency Cloud Nine Spain. With 20 years’ experience of helping clients buy and sell properties in Spain, he has become known as “The Property Doctor” and has contributed to a host of publications, offering practical advice and a refreshing manner that is always truly honest, no-nonsense and full of common-sense.
In 2020 he wrote the book From the Ground Up – The Insider’s Guide to Buying Spanish Property, sharing his years of experience, real life stories, tips and tricks with buyers interested in investing in Spanish Real Estate. It is available on Amazon and features a bonus chapter on the Impact of COVID-19 on the Spanish property market.