The Spanish housing market expanded fast in April, but the really interesting news was the rise in new home sales for the first time in two years.
There were 31,505 homes sales recorded in the property register in April (not counting subsidised housing), up 31% up on the same month last year, according to the latest figures from the National Institute of Statistics (INE).
Compared to 2012 – the year the Spanish property market bottomed out in volume terms – sales were 65% higher.
Year to date (first four months), transactions are up 15% on last year, and 24% on the year before that, so we are now clearly two years into a market recovery in sales.
Looking at year-to-date sales in regions popular with foreign buyers, the Balearics are up a thumping 30% compared to the same period last year. I suspect this is due to a resurgence in German demand in both Mallorca and Ibiza, where professionals on the ground tell me that German demand is significantly up.
In Malaga (home to the Costa del Sol) and Alicante (home to the Costa Blanca), both areas where British buyers traditionally dominate, sales increases were well below the national average. This might have something to do with British buyers waiting to see what happens in the Brexit referendum of 23rd June.
NEW HOME SALES RISE FROM THE ASHES
The new home building industry collapsed during the eight years of crisis now behind us, and housing starts fell 97%. New home sales have been on a declining trend from 2006 (now a decade ago), as the inventory of new homes that people might actually want to buy one day was slowly digested by the market. With no new developments in the pipeline due to lack of finance, we ended up with no new homes for sale in places of rising demand when the recovery started. But now we can see the first sign of the new development business coming back to life, with sales up an annualised 15% in April, the first such increase in two years. From here on I think we will see the start of a recovery in new home sales, with a trend of rising sales as more new developments reach the market. It is astonishing how long it has taken. The collapse in Spain’s new home building industry has been off the charts.