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.