The Spanish property market shrank a modest 1.9 per cent in February, according to the latest figures from the General Council of Notaries.

There were 26,562 property sales witnessed by Spanish notaries in February (down 1.9 per cent year-on-year), of which 25,236 were home sales (excluding social housing), 19,964 were flats, and 5,272 single-family homes, reveal the figures.

The notaries suggest the dip can be explained by the tail-end effect of fiscal reforms that eliminated tax breaks for buyers in previous years, which have played havoc with home sales volumes in the past four years.

On a seasonally adjusted basis property sales rose by 2.6 per cent, and the notaries say the data provides further evidence of stabilisation in the market after more than half a decade of severe contraction.

“Despite this fall in the monthly figures, the series reflects a stabilisation in sales,” is how the notaries put it.

Compared to January, when sales fell 11 per cent year-on-year, the February dip of 1.9 per cent looks modest, and the chart above suggest that sales volumes will move into positive territory for March.

By type of property, resale flat transactions were up 3.4 per cent but new flat sales plunged 34.4 per cent, pushing the overall property market down by 1.9 per cent.

PRICES

Sales volumes weren’t the only market metric to fall in February. Average house prices were also down by 3 per cent, though that was a significant improvement on the -6 per cent in January.

Judging by the figures published by the notaries, Spanish house prices have been falling for nine of the last twelve months, reminding us that the Spanish property crash is far from over.

RESIDENTIAL MORTGAGES

There was better news from the residential mortgage market, where new mortgage signings rose 18.5 per cent to 11,229 new mortgage deeds, though compared to the last twelve that was the second smallest annualised increase in new lending.

In February, mortgage financing was used in 44.5 per cent of home purchases (excluding social housing), up from 37.1 per cent in February 2014, a rise of 20 per cent in a year.

Rising mortgage lending in an expanding housing market is a clear sign that banks are easing up their throttle grip on mortgage credit, which should fuel rising demand and increasing home sales in the coming months.

CONFLICTING DATA

Conflicting data is a depressing feature of the Spanish property market, brought about by official indifference and incompetence. Last week I reported Robust Sales Growth In February based on figures from the Stats Office (INE), and this week I report falling sales figures in February from the notaries. How can this be? It’s because of the time lag of two or three months between sales deeds signed before notaries, which populate the notaries’ data, and inscription in the property register, which inform the INE’s data. Because of the recent volatility in the Spanish housing market, his 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.