The Notaries, and the National Institute of Statistics (INE), published market data in August, but holidays got in the way of a proper analysis. So here we look at the latest homes sales figures graphically, and in a bit more detail.

Monthly Home Sales Excluding Social Housing

Looking at the INE’s monthly home sales in June it’s increasingly clear the market has found a floor in transactions terms, as illustrated by the chart above. The market is bumping along with between 20,000 and 25,000 home sales per month, compared to 77,433 home sales back in January 2007. However, it looks like the market has done all the shrinking it’s going to do. Now the question is; when will homes sales start a sustained recovery, and when will we reach a normal level of home sales for a country the size of Spain?

Monthly Homes Sales – Annualised Change

The following chart shows the annualised change in monthly home sales since 2008. This year, shown in orange, is only the second time in the last seven years that sales have increased for four consecutive months. It doesn’t mean the housing bust is over, but it’s positive news nonetheless.

New vs. Resale Transactions

There is a clear trend emerging with resales growing whilst new build sales plummet, as illustrated by the next chart. Over the coming months and years new build sales will continue to shrink as the pipeline of marketable properties dries up. There is a big inventory of new homes on the market in Spain that nobody will ever buy.

Home Sales By Region

Many coastal regions popular with holiday-home buyers from abroad delivered sales increases way above the national average in June, as illustrated by the next chart. The INE doesn’t break down sales by nationality, but we know from other figures from the Notaries and Property Register that foreigners are the driving force behind the recent increase in Spanish home sales, so this makes sense. In particular, the Costa del Sol (Malaga province) had a good month, with sales registered in the Property Register (based on sales completed a few months before) up by 36 per cent, and resales up by 44 per cent in a year.

And finally, a full summary of Spanish monthly home sales since 2007, according to data from the INE.

Notary Market Figures For June 2014

In contrast to the INE’s figures for June, which count inscriptions in the Property Register based on sales several months before, the housing market figures published by the General Council of Notaries (Consejo General Del Notariado) count actual sales in the month as witnessed by notaries. This means they give a more timely picture of Spanish home sales.

Looking at the notary figures we see a similar picture of a market that has bottomed out in transaction terms, with resales growing robustly from a low base, but new build sales falling equally strongly.

We also see average prices still falling, partly because of the changing composition of sales as resales gain market share at the expense of new build, which tend to be more expensive.

What to expect in the second half of the year? More of the same, with average house price declines getting smaller, transactions steady or increasing slightly, and foreign buyers driving the market in some segments. However, one big agent on the Costa del Sol reports that August was surprisingly quite after strong sales in the Spring, so there are still mixed messages coming from the market.