The Impact of Tourism on the Spanish Property Market
July 29, 2024Spain receives a historic record of 16.1 million international tourists in the first quarter of the year.
As a key component of the Spanish economy, the tourism sector had a notable impact on the property market in 2023. As the economy recovered post-COVID, the sector has shown important signs of revitalisation. Here is how tourism is currently affecting the Spanish property sector:
Revival of Tourism
Following a period of restrictions, Spain received more than 40 million international tourists during the first six months of 2023, 30% more than the previous year. In turn, this increase has had a direct influence on the property sector.
Meanwhile, this year, the number of foreign tourists arriving in Spain had already reached 33.2 million by May, according to data provided by the Touristic Movement on Borders Survey (Frontur) carried out by Spain’s National Statistics Institute (INE).
According to the INE, Spain received a historic record of 16.1 million international visitors in the first quarter of 2024, 17.7% more than last year. In addition, as a result of Easter week, March saw particularly notable figures with 6.3 foreign tourists arriving, an increase of 21% compared to last year.
British tourists top the list, with 2.9 million visiting the country, an increase of 15%. Next come the Germans with more than 2 million (19.5% more) and the French with 1.9 million (15.7% more). There was also an increase in the number of tourists travelling from the United States and Asia, with increases of 10.4% and 18.2% respectively.
Growing Demand for Second Homes
The growth of the tourism sector has also driven increased demand for second homes, particularly on the Spanish coast. In addition, sales in areas like the Costa del Sol and Costa Brava have risen by 25%.
Growth in Short-term Rentals
Short-term rentals, driven by platforms like AirBnB, grew by 35% in the first half of 2023. This increase is generating new investment and profitability opportunities for property owners and driving a dynamic and rapidly expanding rental market.
Increased Investment in Commercial Properties
Investment in commercial properties, especially hotels in popular tourist areas, has increased by 30%, according to Savills Aguirre Newman, further demonstrating confidence in the tourism sector.
Popular Investment Locations
Islands like Ibiza and Mallorca and cities like Barcelona and Malaga have seen a notable increase in demand for properties, both for purchase and rental, with a 20% growth in sales.
In conclusion, the recovery of the tourism sector is also driving the Spanish property market, making it much more attractive for both domestic and international investors.
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