Confidence rising in Spanish property market with sales tipped to rise 10% in 2017
Confidence in the Spanish property market is rising with the research division of Spanish bank BBVA forecasting that home sales this year will be 10% higher than last year.
The bank is also predicting that sales will break through the 500,000 barrier for the first time since the downturn in the nation’s housing market prompted by the economic downturn a decade ago.
BBVA points out that they expect the market to do better than they had previously forecast because of an improving jobs market and a better outlook for the European Union as a whole.
It is also forecasting that prices will rise by 3% on average this year to €1,570 per square meter which will take values back to where they were in 2004, but there is likely to be considerable regional variation. Barcelona, for example, is seeing much higher growth than other parts of the country.
The latest figures from the land registry and Spanish notaires seem to support the view that the market is well on its way to recovery. The data for sales recorded in the Land Registry show transactions surged by 25% in May 2017 compared to the same month last year to 40,671, the first time monthly sales have broken through the 40,000 barrier since September 2008.
The sales data from notaires showed a 17.5% rise in May year on year. Home sales as reported by the Notaries’ Association have grown almost every month since the start of 2014, and May’s figures confirm that trend is still on course.
Both rises come after a dip in sales in May, and according to Mark Stucklin of Spanish Property Insight, the slight fall was probably nothing more than a seasonal pause.
The notaires also reported that the average price of homes sold in May increased 0.3% to €1,318 per square meter. But sales are still down around 40% compared to 2007 and prices down by 30%.
But Stucklin pointed out that comparing today’s market with a decade ago does not necessarily give the best picture as 2007 was the height of the property boom. ‘It is not a healthy benchmark because 2007 was the top of the real estate bubble, but it still helps to show how far the market has fallen. If and when sales get back to 20% below the 2007 peak we can talk of the market having fully recovered,’ he said.
He added that the land registry figures are based on sales recorded, not actual sales that took place in the month and as such they lag the market by about two or three months and they don’t include off plan sales which won’t be counted until the homes are built and delivered next year.
The biggest increase in sales was in and around the Costa Dorada, up 52%, while they increased by 43% in Valencia and 42% on the Costa Brava and 40% in Almeria. But sales were down by 30% in Teruel and 15% in Murcia, which is popular with British buyers.