2013 might turn out to be the bottom of the market, but it was certainly the worst year since the crisis began, according to data based on home sales witnessed by notaries.
The Spanish property market shrank 19.7pc and house prices fell 8.6pc in 2013, reveal the latest data from the notaries. There were just 296,989 homes during 2013, down 19.7pc on the previous year, and the lowest level of sales since the Spanish property bubble burst.
Sales crash 36pc in the last quarter of the year compared to the same period in 2012, mainly due to the fiscal changes that distorted sales patterns between 2012 and 2013, including the elimination of mortgage tax relief for buyers at the start of 2013.
Big increases forecast for Q1 2014
Artificially depressed sales in Q1 2013 mean we can expect artificially inflated sales figures in Q1 this year, when the figures come out. We will probably see a double-digit increase in sales, which will be widely reported as a sign the market is making a robust recovery. I believe the market will start to recover this year, but not as strongly as some reports will suggest.
House prices down 8.6pc in 2013
Average Spanish house prices fell 8.6pc to 1,242 €/m2 in the course of 2013, the sixth consecutive year of falls. Prices fell an annualised 7.7pc in Q4, so there was no clear sign in 2014 that prices were starting to stabilise, at least according to the notaries.
Mortgage lending down 27.8pc in 2013
Mortgage finance was involved in the sale of 254,648 homes last year, down 27.8pc on the previous year, and 81pc down over six years. The collapse in mortgage lending is one of the keys to understanding Spanish property crash.
The value of the average new mortgage fell 6.7pc to 125,070 last year, but improved towards the end of the year, with a small increase in the average value in Q4, the first quarterly increase in two years.