Spanish home sales continue their upward trend with prices also showing signs of recovery

Home sales in Spain have recorded their highest figure for three years having increased by 15.8% in February compared to the same month in 2015.

The data from the National Statistics Institute is further evidence that the housing market recovery remains underway after a stutter in January saw transactions fall 2.9% after 16 months in a row of growth.

It would appear that the recovery is being led by existing homes rather than new builds. Sales of existing homes increased 21.4% year on year while sales of new homes fell by 0.2%.

The data also shows that in the first two months of 2016, home sales increased by 6% compared to the same period in 2015 and again this growth was led by existing homes which saw a rise of 13.7% compared to new home sales falling 15.5% in this period.

Andalucía saw the largest number of sales followed by Catalonia, Madrid and Valencia. The lowest number of sales were recorded in La Rioja, Navarre and Cantabria.

In relative terms, all of Spain’s regions registered increases in home sales, except for La Rioja and Castilla y León with falls of 8.6% and 3.9%, respectively. The regions where housing transactions increased most were the Basque Country with growth of 50.3%, Asturias up 40% and Cantabria up 38.9%.

Meanwhile, data from the latest house price index from property portal Fotocasa shows that the price of existing homes increased by 0.5% in the first quarter of the year to an average of €1,627 per square meter.

This seems to confirm that the housing market recovery is now being seen in terms of price growth as it is the first quarterly rise for the first quarter of any year since 2007 when prices increased by 1.6%. On top of this a trend is emerging as the Fotocasa index also recorded quarterly price increases in the second and third quarters of 2015 of 1.1% and 0.7%, respectively.

The data also shows a year on year price rise of 0.6% for existing homes in March, the highest annual increase since October 2007, when prices rose by 1.2%. Again, a trend is emerging. Year on year prices increases were recorded in 2015 in July, October and November at 0.1%, 0.1% and 0.3% respectively.

Since the peak of the Spanish property market in April 2007 when prices averaged €2,952 per square meter, they have fallen by 44.9% so there is some way to go before values catch up but the initial signs of improvement are there.

Quarter on quarter the picture is also positive with eight regions seeing increased prices compared to the last quarter of 2015. This was led by the Canary Islands with growth of 6.3%, the Balearic Islands up 2.2%, Valencia up 1.4%, Andalucía up 1.2%, Madrid up 1%, Catalonia up 0.9%, Navarre up 0.2% and Cantabria up 0.1%.

The most expensive house prices are in the Basque Country at €2,736 per square meter, followed by Madrid at €2,225 and Catalonia at €2,064. The most affordable region is Castilla-La Mancha at €1,050 per square meter, Extremadura at €1,088 and Murcia at €1,143.