Spanish property sales, not including social housing, were down 33% in May compared to the same month last year, according to new figures from the National Institute of Statistics.

This represents an improvement on April, when the year-on-year drop was 48%, but a large part of the improvement can be explained by Easter, which fell in April this year. When adjusted for business days, the improvement is far less modest, and with a total of just 30,617 property sales in May, it was the weakest month this year for sales, bar April.

On a cumulative basis, sales are down 38% this year compared to the first 5 months of last year.

National sales have not broken the psychologically important 35,000 monthly sales barrier once this year, demonstrating that the market is still badly wounded by the credit crunch and collapse in buyer confidence. January was the best month for house sales this year, with just 33,528 sales, a far cry from the levels seen in the boom.

Resales still biggest casualty, but differential is shrinking

Sales of formerly occupied properties were down the most in May, by 35% to 16,445, compared to a drop of 29% to 17,567 for newly built properties sold by developers. New properties have been outperforming resales since midway through last year, but the differential is closing fast, as the collapse in new contracts signed by developers works its way through the pipeline.

Sales declines by region

By region, sales declined the most in Huelva Province (-65%), home to the Costa de la Luz, followed by Almeria (-49%), Santa Cruz de Tenerife in The Canaries (-46%), and Tarragona, home to the Costa Dorada (-45%). Sales held up best in Malaga, home to the Costa del Sol (-12%), and Murcia (-21%).

The following table gives sales declines for selected regions.

In conclusion there is no sign of buyers returning in force to the Spanish property market, though the annual rate of decline appears to have stabilised somewhere around 30%. However, once the collapse in new sales contracts signed by developers starts to show up in the INE’s figures market activity could take another dive.