The Spanish real estate market is showing signs of a slowdown in the face of headwinds caused by political uncertainty, warns one of the associations of estate agents in Spain.

Madrid’s College of Real Estate Agents (Coapi) has warned that the political instability resulting from the inconclusive General Election in December is starting to undermine the confidence of buyers and investors.

“Buyers are proving ever more reluctant to close deals, preferring to wait and see what happens on the political front,” say Coapi, in a recent press release.

Macro factors are not helping, either. The rising Spanish risk premium, the decline in the IBEX Spanish stock market index, and the bad news from China, are also factors making buyers more nervous about committing to a property purchase and mortgage, say Coapi.

They report that, in the last few weeks, their members “are noticing that clients think it’s not a good moment to take on more debt in a climate of financial and political instability, which is them to delay operations.” The negative results of this will show up in the housing market figures this quarter, they say.

Both homebuyers and investors are reacting to instability with delayed purchases, they report, though investors buying to refurbish and sell or rent are proving to be the most wary. This situation could drag on well into the Spring, they warn, until a new Government with a clear agenda takes power, which might require fresh elections.

Coapi also say that many buyers are confused by housing market figures, and mistakenly think that house prices are rising, when “in reality it’s transaction numbers that are rising.” In the resale market sales are up, but prices are still trending down, they say.