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Germans inch ahead of Brits for mortgages in Spain
In the first quarter of 2025, German buyers accounted for almost 17% of all home loan applications in Spain
Despite the fact that house prices are climbing in Spain and the cost of mortgages is following suit, there’s still plenty of demand from foreign buyers either hoping to relocate to the sunny Costas or snap up a holiday home. And German investors are increasingly coming out on top.
Last year, Germans were the third largest group of foreign buyers across Spain, with the third highest spending on properties. Now, in the early stages of this year, they are leading the way in mortgage applications, consolidating their position as a major player in the market.
According to the latest Idealista reports, during the first quarter of 2025, people from Germany accounted for 16.6% of all foreign demand for home loans, the highest volume of any country.
This means they just pipped British applicants to the post, who applied for 14.2% of mortgages at Spanish banks. Brits are followed a long way back by the Swiss (8.7%) and the Americans (7.7%).
Also in the top 10 are investors from France (7.5%), the Netherlands (6.9%), Ireland (4.4%), Belgium (4%), Italy (2%) and Sweden (1.9%).
The remaining countries account for 26.1% of the demand, although individually their share is marginal. In total, foreigners accounted for 3.6% of the total mortgage demand.
This 3.6% is a far cry from the numbers often quoted by political figures in Spain, who are increasingly blaming a glut of second and holiday homes owned by foreigners for the chronic housing shortage in the country. In fact, President Sanchez still seems intent on hiking up tax rates for non-EU buyers, but the matter is a long way from being settled.
While it could be purely coincidental, it should be noted that last year, before the news of the tax hikes broke, German mortgage applications were barely six-tenths of a percentage point ahead of the British (the German figure stood at 15.3%, compared to 14.7% for the British), while now the gap has widened to reaches 2.4%.
Another significant change in the first quarter is that house buyers from Switzerland and the US have gained ground, along with the French, overtaking Dutch mortgage holders to sixth place in the ranking from third in 2024.
What’s eye-opening, and probably something the Spanish government should be taking a closer look at when apportioning blame for the housing issues, is that the average income of non-resident buyers is vastly higher than that of Spanish would-be home owners.
In Spain, the average salary of people applying for mortgages is €3,379 per month while for foreigners it’s almost double: €6.572. Falling into the highest income brackets are the Swiss and Americans with paychecks exceeding €9,000, while the Italians aren’t too far ahead of Spain, earning, on average, €3,900.
In general, applicants from the EU have lower incomes (those from Germany, France, Belgium, and Ireland all earn less than €6,000).
Finally, the Mediterranean coast is by far the most popular destinations for foreigners looking to invest in property with the help of a mortgage. According to Idealista, the Valencian Community accounts for the largest share of applications, with 26.8%; followed by Andalusia and Catalonia, with 21.1% and 14.5%, respectively.
Madrid and the Canary Islands are the next most prominent regions, along with the Balearic Islands and the Region of Murcia.
Image: Pexels
