Heirs and foreigners: the profile of home buyers in Granada

At a time when credit is becoming more expensive and the property market is closing for young buyers, lower-income families and those living on an average salary, the purchase of homes without mortgages is nevertheless increasing.

In fact Granada is witnessing the highest level of cash buyers in a decade, where 41.86% of the homes sold in 2023 were paid for with mortgage finance, a figure in line with the national average of 42.5% provided by the general council of notaries.

But who are the cash buyers? The profile is varied. The secretary of the Andalusian notary association, Emilio García Alemany, divides it into three blocks.

The first is formed by buyers who have sold one property to finance the purchase of another. "During the pandemic there was an increase in the acquisition of properties through inheritance, which are sometimes sold to finance new acquisitions," he explains.

The second block is foreigners who don't need mortgages and the third is children of parents who have savings and are in a position to help their offspring. "In Andalucía there has been an increase in the use of donations from parents to children for the purchase of homes due to the favourable tax treatment in the region," says the notary.

"Parents over 60, the baby boom generation, help their children and as long as the banks are not giving interest, they invest in housing which gains in value," according to the Association of Property Registrars.

Investors looking for a safe investment in bricks and mortar also enter the equation, although analysts insist that the vast majority of sales and purchases are made by individuals who plan to live in the property.

Property experts consulted in Granada also highlight inheritance as a key factor in the purchase of homes without mortgages. "In Granada a lot of money has been distributed through inheritance, many still come from the elderly who died in the pandemic," says Joaquín Castellón from RK Granada estate agents.

"It is clear that the profile of the buyer has changed, there was always a segment that thought more about how much the mortgage payment was going to be than the final price and now those who do not need financing or are very clear that they are going to get it," says the president of the Granada Association of Real Estate Agents, Ángel Muñoz.

Both experts also point to "very solvent" foreigners in Granada's property market. "Granada is in fashion and they are looking for the Albaicín and picturesque enclaves; many people from Malaga are moving here and this could push up prices," says Joaquín Castellón.

"The year 2024 has started very strong in terms of sales in general," he says. And Muñoz agrees: "As long as rent remains expensive, people prefer to buy, especially now that it seems that rates are going to go down, a very positive sales dynamic is expected this year.