The Spanish property market shrank by 29% in 2008 reveal the latest figures from Spain’s Property Register, released in a report yesterday.
There were a total of 561,500 home sales last year, compared to 788,500 the year before.
Sales of new properties fell 13% to 296,400, and resales fell 41% to 265,000.
On a quarterly basis, there were 113,300 home sales in the last 3 months of the year, down 8% on the previous quarter, with new build sales down 3% to 64,500 and resales down 13% to 48,800.
Extremadura was the only autonomous region where home sales increased, by 0.6%, thanks to an increase of 91% in new sales, and despite a decrease of 20% in resales.
Year on year, sales fell the most in Catalonia (-44%, new build – 37%, resale -49%), The Balearics (-39.5%, new -27%, resale -50.5%), and The Valencian Community (-32.5%, new -14, resale -44%).
The report points out that province on the coast are suffering the biggest declines in sales, thanks to the collapse of the second home market. Sales fell in Tarragona / Costa Dorada (-50.5%), Gerona / Costa Brava (-43%), Barcelona / Maresme (-43.5%), The Balearics (-39.5%), Alicante (-37%), and Tenerife (-36.5%).
The report also points out that new build sales were higher than resale for the third consecutive period, whereas resales are normally higher. As the report explains, this is because many people who bought under construction or off-plan in previous periods are now having to complete or lose their deposits. Were it not for this, the number of new properties bought would be much lower. “In the following quarters we can expect the results for newly built properties to get closer to those for resales,” says the report, which means new build sales will start falling by 40% or more.
The average mortgage value fell 6% last year to 136,148 Euros. Average mortgage terms fell to 307 months (25yrs, 7 months), down 8 months on the previous quarter, and 29 months compared to 2007, when the average mortgage term was 28 years.
98% of new mortgages in Q4 were variable rate.
The average monthly mortgage repayment was 830 Euros in the last quarter, the equivalent of 47.7% of gross average income.