The Spanish property market has grown in volume terms for three consecutive months, but the likeliest explanation is sales brought forward by expiring tax breaks, which means the good news won’t last.
There were 30,555 home sales in February (excluding social housing), up 16pc on the same time last year, and the third month in a row with annualised increases in sales volumes.
Increasing home sales volumes are good news for Spain, as many of the country’s economic problems can be traced back to the real estate crash.
Unfortunately, the recent increase in sales recorded in the Property Register is probably a response to the end of tax breaks for buyers, which took effect at the start of this year. When the effects of this wear off, sales will fall.
Nevertheless, I forecast that, in the absence of some shock like Spain exiting the Euro (which I do not expect in 2012), home sales this year will be higher than last year. Also, I do not expect sales to dip below 20,000 in any month.
As I have said several times in recent articles, I believe the Spanish property market has touched bottom. I hope I’m not wrong, for everyone’s sake.
Thoughts on “Spanish property market grows 16pc in February”
Will needham says:
I don’t agree that the likeliest explanation is sales brought forward by expiring tax breaks, although it’s undoubtedly a factor. I am pretty convinced that the biggest factor in explaining the current surge in sales is bank discounts on their own stock.
I had access to some of the banks data and know some agents who deal with the banks up here on the Costa Blanca / Costa Calida.
The banks have sold huge numbers of properties on the Costa Blanca and Costa Calida. I reckon bank repo sales account for around 30 – 50% of all transactions.
All other things being equal I think we’ll see sales volume drop significantly as the banks shed their stock.
All the best
Will, all valid points my friend. Could you possibly advise me of the companies in Costa Blanca who deal with repo / distressed property sales?
Mark Stucklin says:
Latest news. Home sales fell 26pc in January, and 13pc in February (to 19,364), according to figures from the
Notaries. So yes, the tax break effect has definitely worn off.
House sales fell 27pc in January and 15pc in February, whilst apartment sales fell 26pc and 13pc respectively.
Prices fell 17pc year on year!!!, to 1,146 /m2, say their figures.
patrick hynes says:
looking for small villa south spain.
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