The Spanish property market expanded by 19.1 per cent in 2014, according to the end-year data from the General Council of Notaries, based on home sales witnessed by notaries around Spain.

The market expanded by 21.3 per cent once adjusted for seasonality.

Though the Spanish housing market increased on an annualised basis in both 2010 and 2012, that was largely due to Government tinkering with taxes, and balance sheet shenanigans by the banks. This is the first natural and substantial increase in home sales since boom turned to bust.

House Prices

Average Spanish house prices rose a fraction ( 0.1 per cent) last year, the first time since the crisis began that prices have edged into positive territory, thanks mainly to an increase of 1.4 per cent in the price of flats. “One can see a certain stabilisation of average monthly prices in the last part of the year,” explains the notaries’ report.

Peak-to-present, Spanish house prices are down 30 per cent on average, with resale flats down 37 per cent, and new flats down 21 per cent, all according to the Notaries.

Mortgage Lending

There were 136,791 new residential mortgages signed last year, an increase of 42 per cent on the previous year.

Mortgage lending is the key to resuscitating the Spanish housing market, so last year’s feisty increase in new residential mortgage lending is positive news.

The average new mortgage loan also increased in value to €117,507, up 5.2 per cent in a year.

Mortgage lending tends to suffer from negative and positive feedback loops depending on the property cycle. Right now it looks like better economic news and signs that the housing market is bottoming out, not to mention QE from the ECB, is spurring the banks to lend again, albeit only to the most creditworthy borrowers.