Housing market contracts by 7.9% in July reveal notaries

spanish property sales

The latest property market figures from the General Council of Notaries show home sales, house prices, and mortgage lending all falling in July.

There were 39,841 home sales witnessed by notaries in July, down 7.9% compared to the same month last year (but a more moderate -1.4% when adjusted for seasonality), as illustrated in the chart above (sales) and the chart that follows (yoy).

spanish property sales year on year 2016

The market for flats (excluding subsidised housing) shrank by 10%, whilst single-family home sales were up 0.7%.

With sales growing every previous month this year, the notaries usually say in their press release that the figures reflect the “underlying trend towards recovery in the property market.” This month, however, they made no comment and just stuck to reporting the figures.

MORTGAGES

New mortgage signings were down an annualised 5% to 17,852, which was the first annualised decline in any month in the last few years.

spanish property mortgage market 2016

spanish property mortgage market 2016

HOUSE PRICES

The national average price of property sold in the month was 1,274 €/m2, a decrease of 3.6% compared to the same time last year, showing that Spain as a whole still has a problem with too much supply and not enough buyers for the type of property on offer. But the national average disguises big differences between local markets and segments, with prices stable or rising in markets with strong demand in cities and on the coast, whilst falling in many parts of the interior.

spanish property prices 2016

WHAT GIVES?

Ignoring the national average price index, which doesn’t tell us all that much, why did sales and mortgage lending fall in July after increasing fast for so many months? Perhaps the market is just pausing for breath, which can happen in any recovery, and will return to growth for the rest of the year.

Or perhaps the political gridlock in Madrid is starting to unnerve buyers, and causing them to wait and see. Spain held a second inconclusive general election in July, and research shows that sales tend to fall in months when elections are held. At least that’s the opinion of experts being reported in the Spanish press.

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