In transaction terms the Spanish property market increased by 6 per cent in May compared to the same month last year, according to the latest data from the National Institute of Statistics. This looks like drawing a line under years of declining sales.
There were 25,306 home sales (excluding social housing), up 14 per cent in a month and +4 per cent compared to two years ago. Looking further back, however, the market is still dramatically below its boom-time highs, down 64 per cent compared to May 2007.
Year-to-date, the market is still 6 per cent smaller than it was at the same time last year, but with three consecutive months of annualised gains in sales activity, the May sales figures provide more evidence that the Spanish property market has found a floor, as illustrated by the chart above. Though hardly a cause for celebration, finding a floor is a prerequisite for any recovery, however feeble or slow to get off the ground it then turns out to be.
There is also a clear divergence forming between new build and resales, with resales growing 18 per cent in a year, and new builds down 6 per cent, with the differential in sales widening to 6,382 units. This divergence will carry on rising in the months to come.
Regional there was a clear trend towards rising sales in coastal areas where foreigners tend to buy, and falling sales in the interior where locals are the main buyers. Sales were up 43 per cent in the Costa del Sol, and 41 per cent in the Balearics, increases no doubt driven by foreign demand. Meanwhile, sales plunged 60 per cent in Guadalajara, 50 per cent in Soria, and even fell in Madrid, by 6 per cent.
After seven years of almost continually declining sales, with double-digit percentage declines in every year bar 2010, when sales increased 5 per cent thanks to Government intervention, and last year, when sales fell just 1 per cent, any change from the now familiar story of relentless contraction is good news, no matter how trivial the improvement.
Spanish Property Market Sales Summary Table