This is a website for buyers, owners, and sellers of property in Spain, offering reliable information and resources to help you get things done with confidence. It is run by Mark Stücklin, author of the Spanish Property Doctor Column in The Sunday Times (2005-2008), and the book ‘Need to Know: Buying Property in Spain’ published by Collins.
Partly due to Government tinkering with the tax code, the Spanish property market grew by an annualised 26 per cent 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.
Resales were up 36 per cent, and new sales up 7 per cent, reflecting the collapse in new construction. The pipeline of new homes that people actually want to buy is running dry.
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. Which explains why we had contradictory news in recent months with Spanish home sales surging and Spanish home sales plunging in February. The impact of 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 (excluding social housing). With 24,377 sales in March the market was up 5 per cent on a monthly basis, and the highest for two years, up 10 per cent 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.
Costa del Sales
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.
Always bearing in mind that fiscal distortions played some part, sales increased an annualised 113% in Malaga, home to the Costa del Sol, and 109% in Cadiz, home to the Costa de la Luz. Sales increases were also way above the national average in the Balearics, Girona (Costa Brava) and Barcelona. Growing foreign demand is part of the explanation for these huge increases on the coast.
Juan Miguel says:
Hope springs eternal in the breast of the believer!
A few things to remember.
Banks have been told by the ECB to dump their toxic assets (Property)
To do so they are once again!! offering 115% mortgages and low,low prices.
The main customer has been investment companies who struck a deal with the banks.
Brits , Germans and French are leaving Spain approx 250,000 last year adding to the property bubble.
This amounts to a loss in Spanish income of approx Five billion a year.
Add to this that Spains so called growth of 0.4% has only been produced by its deflation of the total GNP.
Although I would love to believe it .
Happy days are not yet here again.
Juan Miguel
Mark Stücklin says:
Nowhere in this article does it suggest that happy days are here again, though I do know estate agents in some areas where foreigners buy are having the best year for a long time. Whilst flagging up the tax effect on the figures, this article argues the overall market has found a floor, which is a welcome sign of stability after years of declines. Otherwise I agree the Spanish economy and property market face lots of headwinds.
Phil says:
I see no evidence that the overall market has found a floor as has been said many times before. The property market in select areas may have found a floor, but the market in other areas often in inland towns and villages is dire, in fact pretty unsellable still with so much similar poor stock.
It’s true there is foreign interest but not so with Brits who are also foreigners, in fact the opposite is happening with them. Many are desperate to sell but stuck with negative equity after Banks overvalued their properties for mortgage purposes and those Brits cannot sell for current falling valuations because they will still have a large debt owed to the banks. Example: I know a couple with 240k euro mortgage but valuation before fees are deducted is 180k euro so approx 70k euro outstanding debt but still having to service 240k of mortgage!
You talk of ‘huge increases on the coast’ YOY sales to foreigners, not so huge when you consider they are starting from a low base, ie 100% 0f 1 equals 2 and so on.
Spanish Property says:
The market is certainly gaining momentum but we are no where near the levels pre 2008, the Spanish property market is moving a lot slower than the rest of Europe but that does mean we have some great bargains for cash buyers. Thanks for posting the article.
Phil says:
Hmm Agent Post!, ‘Thanks for posting the article’ Lol