Data from the Spanish Colegio de Registradores (Land Registry) covering the first quarter of 2013 show that house sales were up 28.73% compared with the final quarter of 2012.
There were 100,768 transactions, the highest for the last eight quarters but this was partly attributable to the rise in VAT on new builds from 4% to 10% on 01 January 2013 and the end of various tax breaks.
Figures from Solvia, the real estate branch of Banco Sabadell, also indicate that sales are increasing. They have sold 5,946 homes since the middle of March with discounts of up to 40%. Last year Solvia sold 13,777 homes and aim to sell 16,000 in 2013. They now have a website and helpline in Russian to cater for a growing demand from this part of the world.
When it comes to prices it is clear that they are still falling and Spain is still attracting a lot of interest from foreign buyers as a result. The Land Registry data shows that values are down 2.32% in the first quarter of 2013, a decrease of 30.3% from the peak of the market in 2007.
News that new rules will be brought in this summer to give a residency visa to buyers from outside the European Union purchasing property worth €500,000 or more is also set to increase interest from abroad. The new arrangements are set to take effect from 01 January 2014.
‘Spain’s economy is still struggling in contrast with other countries, giving foreign home buyers a competitive edge. Other nationalities are comparatively affluent and are finding it hard to resist bargain Spanish property,’ said Chris Mercer, director of agents Mercers based in Murcia.
‘As a result the number of houses purchased by foreigners in Spain has been growing for the last two and a half years, almost at 2006 levels where they represented 8.97% of the market. I can only see this rising further, aided a little by the visa scheme for those purchasing property at the higher end of the market,’ he added.
Indeed, the Land Registry report shows that 8.63% of property purchases were attributed to non Spanish buyers in the first three months of the year, much greater than the 4.24% recorded in 2009. British buyers lead the way with 14.9% of the foreign market share followed by Russians with 9%, the French with 8.7% , Belgians with 7.41%, Germans with 6.9% and Norwegians with 6.02%.
Mercer has seen a steady number of British buyers. ‘In the first quarter of 2013, half our sales have been to Brits, a percentage that has remained the same for about the last six to 12 months. I do however think that there are more Brits starting to consider an overseas property purchase with us in Murcia, so I expect this figure to rise for the next quarter,’ he explained.
‘We then tend to sell to several Belgian, French, and Norwegian and Swedish clients with the Dutch and Germans also starting to make a resurgence. Russians haven’t quite made it to Murcia yet. Perhaps when the Paramount Theme Park gets underway they’ll materialise. We certainly don’t have many golden visa homes to offer them, average prices are much lower than half a million euros in this part of Spain,’ he added.
But other figures suggest that sales are falling. According to figures from the National Institute of Statistics (INE), sales fell 12% to below 20,000 in March. This is only the second time since the economic downturn in 2007 that sales have fallen below this level. Sales are now 72% down compared to March 2007.
According to Spanish property expert Mark Stucklin of Spanish Property Insight this is probably due to higher figures in previous months due to sales being brought forward in the run up to tax breaks coming to an end in December 2012. Although a higher number of sales took place at the end of 2012 the higher sales figures in January and February were because the registration of sales is several weeks behind the actual transaction. Although Stucklin did say he was surprised by the steep decline of sales recorded in March.
New home sales were hit the hardest, down 44% in a month, compared to a 31% fall in resales. Stucklin points out that new home sales have been hit by the rise in VAT rising from 4% to 10% and the termination of mortgage interest relief for buyers.
He expects sales to pick up again. ‘Now that distortions from fiscal changes have passed through the system we can expect sales to recover somewhat next month. Taking the first quarter as a whole, the market was still 10% up on last year,’ he said.
Then there are the latest figures from the Spanish Notaires association which shows that sales fell 31% in March and by 25% in the first three months of the year whilst prices fell 10% on an annual basis.
‘Sales witnessed by Notaries get registered and published by the INE a few months later, so we can expect falling sales figures published by the INE for at least the next couple of months,’ added Stucklin.
