The Spanish housing market shrank 15pc according to sales inscribed in the property register in August, and published by the National Institute of Statistics (INE).
These figures report home sales that took place several months earlier, around June. It takes a couple of months for sales to be inscribed in the property register and published by the INE.
Excluding social housing there were 21,317 home sales inscribed in the property register in August, down 15pc in a year and 9pc in a month.
Rising transaction costs
High and rising transaction costs are one big reason why the Spanish property market is still shrinking seven years after the crisis started. Other than in the Canaries, it now costs between 10pc and 15pc to buy a home in Spain, which is a major obstacle for home sales.
Catalonia and Valencia both raised the tax on buying homes to 10pc in August, which I expect will have a negative impact on sales in those regions, both of which are big and important markets.
A decline of 25pc in the sale of new homes was the main culprit for the lurch down in sales volumes inscribed in August, with resales down just 6pc. The following chart shows how sales brake down between new build (orange) and resales (red).
By region, the biggest increase took place in Navarre (+20pc) and the biggest decline was in Cantabria (-39pc).
The following table summarise home sales figures published by the INE for the last seven years, since the bubble burst.