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Spanish property market expands for second consecutive month

The growth was feeble, but signs that the market has found a floor are getting stronger.

There were 22,648 house sales in September (excluding social housing), up 3pc on the same time last year, and the second consecutive month of growth. That may not sound like much, but any good news for the market is welcome in these dark days.

You can see from the chart above that the market has found a floor at just over 20,000 home sales per month, which translates into 250,000 a year. Assuming there are 16 million households in Spain, that means just 1.5pc of households buy a new home each year. In the boom years it used to be 2.5pc to 3pc or more. Now people are either renting or staying put.

The good news that the market posted a small annual gain was tempered by the fact that it shrank by 9pc on a monthly basis. So clearly we are not out of the woods yet.

The following table summarise all the key data (click to enlarge).

Thoughts on “Spanish property market expands for second consecutive month

  • Of course this isn’t the beginning of the end. IVA (Spanish VAT) on new build properties increases sharply on 1 January 2013 and various tax incentives to purchasing a new home disappear. People are just rushing to buy before the end of the year. Property prices will return to a steady descent in January 2013.
    The emergence of the ‘banco malo’ (the bad bank) will drag prices down at an even faster rate than before as it tries to offload as much property as possible as quickly as possible.

  • Not the end of the beginning, rather the end of the prologue. With all the houses in the ‘bad bank’ coming onto the market, plus the possibility of France needing a bail out in 2013/14 the value of the euro will diminish. I feel for all those pensioners wishing to sell . Dump and run if you can absorb the loss- at least you will have some certainty back in your lives.

  • The bad bank will take a year or two before it starts selling appreciable numbers of properties – simply because they are overpriced at the value at which they are being transferred to the bad bank in the first place. The market crash is not affected much by prices anyway – the problem is confidence and available credit, neither of which are present in Spain.

  • It’s entirely to be expected that all the banks holding such large portfolios of colossally-overpriced properties, are going to transfer them to Banco Malo for as much as Banco M will agree to accept them. And how long is it going to take for some “common ground” to be agreed?
    If they didn’t try this route, then the liquidity of the dozens of Spanish banks who funded all the dubious constructions in the first place, would never recover.
    But from just where, amd how, is Banco Malo going to financed? Central Government has not got the money, and it’s unlikely that the EU will co-operate (with their own tax payers money) to get Spain solvent again.
    A liability of what? 600 BILLION, is 600 Billion WHEREVER it comes home to roost.
    If Banco Malo simply try to offload these estimated ONE MILLION properties to whoever will be prepared to pay for them, any speculator is not going to be paying even the current going rate (around 1/4 of the previous values), they’re going to be looking at perhaps 10% of the-once values.
    Time will tell, but I personally just don’t think that it’s going to be either THAT easy, or THAT fast.
    To me, it’s little more than passing the buck, or placing all of ones stinkng bad eggs in just the one basket – or more precisely, BANK.
    Someone convince me I’m wrong, PLEASE.

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