Housing market shrinks by 21pc in March

Foreigners might be buying more holiday-homes in Spain (see previous article) but it’s not enough to compensate for the collapse in Spanish demand for primary housing.

There were just 22,072 Spanish home sales in March (excluding social housing), 21pc less than a year ago and 28pc down in a month, according to the latest figures from the National Statistics Institute (INE).

2012 is turning out to be the worst year yet since Spain’s real estate bubble burst back in 2007, as illustrated by the chart above. Year to date the market is down 28pc on the same period last year.

The housing market in March was almost 70pc smaller than March 2007, when the boom was just starting to cool. Add in a price fall of, say, 30pc, and the market is down almost 80pc by value.

Unemployment heading for 25pc and a credit crunch in the Spanish banking sector help explain these remarkably awful figures.

The following table gives monthly house sales figures (excluding social housing) for the last 6 years. Click to enlarge.



3 thoughts on “Housing market shrinks by 21pc in March”

  1. Ed

    I always find the parrallels between the irish and the spanish property markets interesting. Irish property values have fallen 75% from peak, and word on the ground is that the market is now beginning to restart.

    Spanish values are on average only 25% off peak (correct me if I’m wrong) which says to me the politics has to be fixed or this property crisis will drag on for a few years to come…

  2. Juan Miguel

    Wishful thinking and banks state that property prices have only fallen by 25%. Look around in the local papers and imobilaria windows. Many resales show the true decline of 50% but the worry is as you have said it could go lower and reflect the Irish experience of a 75% reduction. Personally I believe that it will level out at about -60% of 2007 realistic values. The real concern is, will the Euro fail and Spain take a devaluation of about 30% as it returns to its own currency. The silver lining then will be that properties will start to rise again.

    Quien Saben Who knows??

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About Mark Stücklin

Mark Stücklin is a Barcelona-based property market analyst and consultant, and author of the 'Spanish Property Doctor' column in the Sunday Times (2005 - 2008). He can be reached by email on ms@spanishpropertyinsight.com.