Recovery in property sales in Spain proving sustainable, latest data suggests
Homes sales in Spain are showing strong growth, up by 13.9% in the second quarter of this year following a rise of 4.4% in the first quarter, according to the latest data from the Ministry of Public Works.
It is the six quarter in a row when sales have increased year on year, suggesting that the recovery in the Spanish real estate market is being sustained. It is also the second best quarter since 2010.
However, the market still has some way to go to its pre-crisis level as sales are 58% lower than the peak of 2006.
A breakdown of the figures shows that some 12.5% of sales were for new homes and sales increased in 14 regions, as well as in the autonomous cities of Ceuta and Melilla, and fell in three.
The biggest increases were in La Rioja with growth of 44.2%, Ceuta and Melilla at 33.9%, the Balearic Islands at 30.1%, Cantabria at 29.4% and Murcia at 25.7%. Sales fell by 14.7% in Navarra, by 1.5% in Extremadura and by 0.6% in the Basque Country.
Overseas buyers living in Spain accounted for 17.2% of sales while sales to non-resident foreigners amounted to 5%. Alicante had the highest number of foreign buyers at 4,141, Málaga 2,517, Barcelona 1,470, Madrid 1,173 and Tenerife 1,099.
The sustained recovery is also confirmed in the latest figures from the General Council of Notaires, showing that the property market grew by 11% in July compared to the same month in 2014.
The data shows that the Spanish property market has expanded in nine of the last 12 months with only January and February seeing sales fall.
According to Mark Stucklin, of Spanish Property Insight one of the main factors behind rising home sales is easier, cheaper mortgage credit. There were 17,450 new mortgages signed in July, up 27% on the same month last year, taking the number of sales involving mortgage financing to 46%, highest level since the boom years in the middle of the previous decade.
Prices area also starting to recover. The data from the official house price index published by the National Institute of Statistics shows that they rose by 4% over the 12 months to the second quarter of 2015.
The Balearics saw the biggest rise in prices with growth of 7.3%, driven by a 7.8% rise in new build prices and a 7.4% rise in resale prices. Indeed, new and resale house prices have been rising since the second quarter of last year, and the trend appears to be picking up speed for both new and resale properties.
But figures from the Notaries suggest that prices are not yet in recovery mode. The data from them shows prices down by 0.3% in the second quarter of the year. But Stucklin believes that there are reasons to be sceptical about the index.
Compared to 2007, Spanish house prices are down 33%, according to the index with resale prices down 40% and new build prices down 24% while by region prices are down the most in Catalonia, where house prices now stand at just 58% of their level in 2007, and down the least in Andalusia, where they are now 76% of the 2007 level, down 24%.
