There were just 15,027 home sales in August, according to figures from the notaries, based on sales witnessed by them.
I recently published an article on the latest data from the National Institute of Statistics, which lags the data from the notaries by a couple of months, showing signs that the Spanish property market is turning down again. This data from the notaries seems to confirm it.
It is incredible that the Spanish property market is still capable of shrinking almost 30pc after six years of crisis and falling sales. This was the biggest decline in five months.
“Therefore, there are no signs of an end to the adjustment in the housing market,” goes the report from the notaries.
High transaction costs will be a big part of the problem. VAT on new homes is now 10pc everywhere in Spain except the Canaries, and the transfer tax on resales has just gone up to 10pc in key markets like Valencia and Catalonia. High transactions costs are sure to be driving down demand.
Thin markets provide unreliable data
With so few sales, the market is now so “thin” that price data, never very reliable, becomes too volatile to take seriously. A small number of sales can distort the price index.
Whist is exactly what happened in August. The price per square meter of housing in Spain rose by 0.7pc in August, to 1,219 €/m2, according to the notaries, and despite the collapse in sales.
With vendors outnumbering buyers by a wide margin, it’s obvious that Spanish house prices didn’t actually rise in August. What happened was a small number of sales of detached single-family homes pushed the price index up in a thin market.
Mortgage lending also collapsed in August, down 33.5pc to 12,808. Mortgages for home purchases fell 35.6pc.