The market appears to be entering its worst year yet
There were 26,300 home sales in February (excluding social housing), 33pc down on the same month last year, and 8pc down on January, according to the latest figures from the National Institute of Statistics (INE).
The 33pc fall in February comes after a 28pc fall in January, meaning that after the first 2 months this is the worst year since the crisis began, as you can see from the chart above.
Year-to-date, the Spanish property market is 63pc smaller in volume terms than it was in 2007. Taking into account price falls between 30pc and 50pc, the market has shrunk by 80pc or more in value terms.
The following chart illustrates how home sales collapsed in February this year, after improving a fraction in the previous 2 years. There are many explanations for this, including the return of the credit crunch, a new recession and surging unemployment, and banks not distorting sales figures to suit their balance sheets.
And finally, a table summarising monthly sales figures (exc. social housing) over the last 6 years:
One thought on “Spanish property market shrinks 33pc in February”
The NYT is reporting that the Spanish banks are going to need to be rescued by the EU’s ( taxpayer) bail out fund, because of all the non performing real estate loans that are on their books. The banks will in my estimation have to sell these loans at a really discounted price , get their stand by credit and get on with life. In the meantime the new owners of these properties could afford to sell them way below the present ‘market price’ and still make a profit .
In turn this will force down the price of homes currently for sale. Reality will finally hit home as to the real market price, sooner rather than later. Sad that it is the taxpayer having to bail out the reckless lending practises of the spanish banks. Let one go tits up and maybe the lessons might hit home with the remaining institutions.