By Paul Brazell Acosta, Spanish Real Estate Expert and Director of Cloud Nine Spain
The strong dollar and weak Euro is shifting the balance of buyers that we’re seeing here on the Costa del Sol. While we’ve always had American and Canadian buyers, they’ve always been a small minority. However, things are really changing and North American buyers represent 25% of our sales over the last four months.
This is a truly multinational property market, and out of the last 24 sales, there have been 14 different nationalities represented. Americans are out in front with six, Kuwait and the Netherlands have three each, two sales come from UK buyers and then there’s a complete a mix of other nationalities, including Arab and Middle Eastern buyers who came over after Ramadan to look at properties.
However, this is the first time that I have seen North American buyers dominate in this way. The US and Canadian dollar-Euro exchange rate has caused a lot of people to realise that a European asset is a decently priced investment right now. The interest is definitely translating to sales and the last four deals we’ve done have been to three Americans and one Canadian buyer.
The North American Buying Journey
Due to the distance, there’s a lot of research done by these buyers before they get in touch and then we work with them via video calls and virtual viewings to help them familiarise themselves with the area and the property choice.
In fact, a recent buyer spent 2-3 weeks with my colleagues discussing, shortlisting and viewing properties virtually, before coming over to touch, feel and experience it in person. In the end they bought on the same development that they had identified as their favourite from the video tours. They felt very comfortable, because they’d already felt that they got to know the place. So, it was work and time well-spent for them ahead of the visit.
These buyers are committed to purchasing something before they travel, as they have to make specific trips to come here to look at properties and to decide. Because they’re travelling so far, they are on a mission to find something, as they don’t want to have to come back next month. It is a lot easier if they have taken time to research and shortlist before they arrive, to confidently make the right decision and purchase.
Taking advantage of the Golden Visa
Most of our American and Canadian buyers are interested in obtaining a Golden Visa, which provides buyers outside of the EU with residency in Spain for their immediate family without having to become tax resident. This is available with a cash investment of €500K on a property.
This scheme provides several important benefits for our North American buyers. Most importantly, it entitles the buyer (plus his/her spouse and financially dependent children) to Spanish residency and be able to travel freely to any country that is part of the Schengen convention.
Secondly, the investor only needs to spend 1 day per year in Spain to maintain their residency and you don’t need to become tax resident if you spend less than 183 days in Spain per year. This means you can continue to run your financial and tax affairs through your home country, which is very attractive to our North American buyers.
The application process is very simple and approval is normally given within 14 days. The Golden Visa needs to be renewed after the first 12 months, and then after a further 2 years.
Should the property price exceed the €500K investment, they may be eligible to obtain mortgage funding with a Spanish lender for the remainder. Our average transaction with our North American buyers has been over 1 million Euros, and with the strong dollar on this level of investment, the savings are significant.
Open to a wide range of areas and happy to travel
One thing we definitely notice from our American and Canadian buyers is their perception that the Costa del Sol is such a tiny little place. Obviously, they come from big countries and are used to travelling significant distances, so think nothing of flying into Madrid, spending a couple of days there, then coming down to the Costa del Sol.
These buyers are very open to the different areas on offer across the whole Costa del Sol and listen to our advice on where would suit them best in terms of lifestyle and property options.
We’ve had clients who bought in Sotogrande, Mijas Costa and Marbella. Some clients like to be near the ocean and have that Mediterranean kind of vibe. Others value more of the culture, so love the quaint and picturesque Old Town of Marbella, but it really does vary, depending on where they are from and their motivations to buy.
We’re here to be their guide and help them before and during their visit to narrow down the best areas and properties for them.
When to travel to the Costa del Sol to look at properties
Fall is one of the very best times of the year, in my opinion, to purchase a home here in the Costa del Sol area. The weather is spectacular, the flights and accommodation are more affordable, there’s less traffic and the properties that were rented out over summer and so couldn’t be shown are now free and therefore buyers have more choice.
If you’re thinking of buying and coming over next year, I would definitely avoid the July and August madness. Although it’s tempting to try and combine a family holiday with looking at properties, 50%-60% of the resale market is out of bounds because it’s rented out. If you’re looking at off-plan properties that’s OK, but if you are looking specifically to buy a resale property, please don’t come in August, because it’s a nightmare and you are not actually helping yourselves, because you’re not seeing all of the stock that would normally be available.
Paul Brazell Acosta is a Spanish Real Estate Expert, originally from America, but raised in Spain. He currently lives in Marbella on the Spanish Costa del Sol, with his wife and two teenage children and is Director of realtors Cloud Nine Spain. He helps international buyers purchase property in Spain and unlock the incredible lifestyle he loves so much.