A new report from Spain’s Property Registrars suggests that transactions – the lifeblood of the property market – are bottoming out, though it is still too early to declare a recovery under way.
The number of property deeds of sale inscribed in the property registry rose by 7% in Q1 compared to same period last year, according to the latest report from Spain’s College of Property Registrars. This is the first time in several years that annualised sales have risen in a quarter.
On a quarterly basis (Q4 2009 vs. Q1 2010), registered sales were up by healthy 16.3% (not adjusting for seasonal factors such as holidays), giving “the highest volume of transactions in the last year and a half,” says the report. After adjusting for seasonal factors, sales were up 1.83% in Q1, the first positive quarterly result after 15 consecutive quarterly declines.
Of the total 117,911 deeds inscribed in the register in Q1, 60,740 were new builds and 57,171 resales, a quarterly increase of 16% in new build sales, and 17% in resales. This points towards a “slow but steady recovery of the relative importance of resales, now 48.5% of the total,” says the report. On an annualised basis, resales were up 22% whilst new builds were down 4%.
Sales still down over 12 months
On a 12-month basis to end March, however, sales were down 15% to 430,871 compared to the previous 12 month period. Still, that is an improvement on the -25% fall over 12 months to the end of December. Sales fell over 12 months by 26.5% in the Canaries, 21% in Andalucia, and 21% in Murcia.
Despite the positive sales number in Q1, the Registrars caution against declaring a recovery under way. They point out that temporary factors such as the imminent increase in VAT on home sales, and elimination of tax relief on mortgage payments, could be bringing forward sales and boosting the figures temporarily.
On a more positive note they also note that sales declines are getting smaller in coastal areas that suffered the most from the slump in sales, perhaps due to lower prices stimulating demand. Most of the properties such as holiday and retirement homes that interest foreign buyers are located in Spain’s coastal regions.
Quarterly and 12-months % change in sales by autonomous regions: