Spanish property sales up 26% but expert warns data is skewed by tax changes
The Spanish property market sales grew by 26% year on year in March according to the latest figures from the National Institute of Statistics (INE).
Coastal areas, where foreigners tend to buy holiday and retirement homes, posted particularly strong gains with resales up 36% and new sales up 7%, the data also shows.
But the positive figures are partly due to the government tinkering with the tax code per cent, according to Spanish property expert Mark Stucklin of Spanish Property Insight.
‘This dramatic rise in Spanish home sales can partly be explained by tax changes, which have been playing havoc with Spain’s property market statistics in recent months. The elimination of tax breaks for mortgage borrowers at the end of 2012 artificially inflated then depressed sales statistics both at the time, and now that year on year numbers are out,’ he explained.
He pointed out that this explains why there has been so much contradictory news in recent months with figures showing sales both surging and plunging at the same time. He believes that the impact of these fiscal distortions on Spanish property sales should now start to wear off.
‘Fiscal distortions apart, the Spanish property market increasingly looks like it has bottomed out between 20,000 and 25,000 homes sales a month. With 24,377 sales in March the market was up 5% on a monthly basis, and the highest for two years, up 10% on March 2012. So the underlying trend looks like a depressed market finally showing signs of stability, though no recovery outside of coastal areas and big cities,’ said Stucklin.
The regional story in the latest numbers clearly shows coastal regions where foreigners buy holiday and retirement homes doing much better than the national average.
Bearing in mind that fiscal distortions played some part, sales increased year on year by 113% in Malaga, and 109% in Cadiz. Sales increases were also way above the national average in the Balearics, the Costa Brava and Barcelona and Stucklin said growing foreign demand is part of the explanation for these huge increases on the coast.