Home sales in Spain increased an annualised 5 per cent in April to 22,199 (excluding social housing), according to the latest figures from the National Institute of Statistics, based on data from the Property Registrars.
Home sales have now increased for two consecutive months, following a 26 per cent increase in March that had more to do with the end of mortgage tax relief than a recovery in sales. Even so, the data seems to suggest that the market has found a floor after seven years of declining sales, as illustrated by the chart above.
New vs. Resale Home Sales
Breaking down sales into new and resale transactions, both segments were up with new sales increasing by 4 per cent, and resales by 7 per cent on an annualised basis. Resales, however, are the dominant segment again, as they were before the building boom, and the difference in sales between the two segments has been widening as new sales decline faster than resales after a tax-charged surge at the start of the year. This difference, illustrated by the black line in the next chart (right-axis), will likely get larger as the pipeline of new homes that people actually want to buy dries up over the next few years. There is bound to come a point when new home sales fall below 5,000 per month.
Spanish Home Sales by Region
By region, results were mixed in April, with no clear distinction between coastal and other areas. Sales were up more than 20 per cent in Las Palmas (Canaries), Barcelona, and the Balearics, but down by double-digits in other coastal areas like Tenerife (Canaries), Murcia, and the Costa Tropical.
Overall it looks like the market has hit the floor and stayed there, with none of the dead-cat bounce we have seen in the past. After seven years of crisis, that’s relatively good news for the Spanish property market. There is, however, a long way to go before the market returns to any semblance of normality outside of some specific segments where foreigners are buying in greater numbers against a backdrop of limited housing inventories.
Spanish Property Market Summary Table