MedMarkets: Americans rushing to Spain’s housing market before it’s too late
The Spanish government has recently announced it would soon be terminating its residency-by-investment visa program for non-EU nationals, which has spurred a rush among American nationals to invest in the Spanish real estate market before it is too late.
This rush goes back to the last few years as Spain has been sending signals it would be regulating its housing and tourism markets to limit foreign exacerbation of its housing crisis. Over the last 3 years, the number of U.S. residents in Spain has risen by 39% and in the last few days it has skyrocketed.
Under this program which will be ended on April, 3, 2025, Spain has allowed non-EU nationals to obtain residency on the condition they invest in the real estate market.
Current visa holders will not be affected by the recent decision while applications submitted before the April 3 deadline will still be processed.
The Spanish government has grounded its decision on inflation in the real estate sector. Spain’s housing crisis is among the most significant in Western Europe. Rising costs of building materials as an effect of the energy crisis, shortage of final land, legislative amendments, and lack of public spending and manpower are all factors that have taken their toll on the Spanish real estate market, causing an imbalance between supply and demand according to recent study by BBVA.
The report notes that “since 2021, only about 13.000 protected housing units have been started per year, compared to 70.000 per year from 1995 to 2010.” Therefore it recommends increasing public spending in this area to increase the social housing stock to 20% so as to balance the real estate market.
The expansion of foreign tourism in Spain has exacerbated the issue as many property owners have chosen to rent their property to tourists due to housing market insecurities.
At a regional level, Barcelona decided in July 2024 to end tourist apartment rentals by 2028. These rentals, which have increased by 68% in the last 10 years, have exacerbated to city’s hosuing inflation by 38%.
