The Spanish property market delivered another month of robust growth in February, driven by a surge in resales of more than 50 per cent, whilst the new build market continued to implode.

There were 26,451 home sales inscribed in the property register in February (excluding social housing), according to the latest figures from the National Institute of Statistics (INE). These figures reflects sales completed (witnessed before notary) in the preceding two or three months.

February sales this year were higher than 2014 and 2012, but lower than 2013, when tax breaks for buyers inflated registered sales that year. It looks like the market bottomed out in 2014, and is now on the road to recovery, in volume terms at least.

Year on year, the market expanded 14 per cent as a whole, but 53 per cent in the resale market, a substantial increase by any standards.

Sales of homes classified as “newly built”, on the other hand, bombed by 30 per cent compared to the same month last year.

Sales of new homes are crashing as the inventory of properties that people actually want to buy dries up.

It’s reasonable to assume that overall sales would have been even higher if the new build inventory was more attractive.

Regional Variations

The growth in homes sales in coastal areas that attract foreign buyers were generally above the national average, as foreign demand is boosting sales in most of those areas.

Sales increases were particularly strong in Cadiz province, home to the Costa de la Luz, and Barcelona, a city that is steadily becoming Europe’s number one ‘urban resort’.

At the other end of the scale, sales continue to tank in Castellón province, home to the Costa Azahar. There are several structural reasons, including an almost non-existent sales channel, to explain why this attractive coastal region is failing to capitalise on growing foreign demand for holiday homes in Spain. Structural problems take time to sort out, so I don’t see this coast turning into a property hotspot anytime soon.

Looking at regional sales broken down by type of property, the following chart makes clear just how much the collapse on new home sales is dragging down the market in some areas. In the Balearics property market, for example, new home sales fell 47 per cent, whilst resales exploded 82 per cent. With the pipeline of new developments in the regions bone dry, demand for attractive new homes is completely frustrated.

Finally, a summary table of monthly home sales for the last seven years, from boom to bust, and the first signs of recovery.

NOTE: These figures reflect sales that were closed (deeds signed before notary) in the preceding two or three months, and lag the figures published by the notaries a couple of months earlier. This time lag means it is not uncommon for the notaries to publish figures showing rising sales, whilst the INE publishes figures showing falling sales, and visa versa, all in the same month.