The number of properties bought and sold in Spain during March was 39% lower than a year earlier, according to the National Institute of Statistics (INE). This provides further evidence that the Spanish property market is going into a deep slump.
Ignoring social housing, there were 41,982 property sales registered in March, the lowest monthly figure since the INE started publishing these figures in 2007.
Autonomous regions with Mediterranean coastlines are some of the worst affected by the slump, in part due to a high proportion of second homes. Property sales fell by 59% in The Balearics, 56% in the Valencian Region, and 56% in Catalonia.
On the face of it, the resale market appears hardest hit by the collapse in sales: transactions fell 46% in March, to 23,540 transactions, compared to 28% for new builds from developers, which fell to 22,534 transactions. Sales of holiday homes were down 46% on average.
However, the G-14 group of leading Spanish developers has been quick to point out that, when it comes to new build sales by developers, the figures published by the INE are backward looking, and do not reflect the true market situation. According to the G-14, new sales by developers are down by 60%, which means the new development market is in even worse shape than the resale market.
But even according to the INE’s figures, new build sales were down almost half in some key regions popular with foreign buyers, for example Catalonia (-46%), Murcia (-45%), and The Balearics (-44%).
The G-14 lays all the blame for their collapse in sales on the banks and the credit crunch, and warns that until the banks start lending again the market will remain moribund.
Regardless of the outcry from developers, there is no sign that banks will start lending freely anytime soon. According to the INE, mortgage approvals fell by 40% in March compared to a year earlier, the biggest such fall since started collecting this data in 2003.
Developer calls for government intervention to stimulate the housing market have fallen on deaf ears.