The post-election political uncertainty is having a negative impact on Spanish home sales, says BBVA Research.

The property market suffered a mild contraction in the run up to, and aftermath of, the Spanish General Election in December, reports BBVA Research, part of Spain’s second biggest banking group BBVA.

A mild but noticeable slowdown in home sales will continue for the duration of the political uncertainty resulting from the inability of any party to form a Government with a stable majority in Parliament. A month and a half after the General Election, it is still not clear what the next Government will look like, and fresh elections are a possibility.

Home sales in November declined 2.5% on a monthly basis, according to the latest figures from the General Council of Notaries, the first decline in many months, though on an annualised basis Spanish home sales were up 7%.

“In the last few months home sales appeared to have stalled due to greater political uncertainty coupled with the instability in [financial] markets, which has also been reflected in the reduction in consumer confidence in January,” says the latest report from BBVA Research.

Sales will likely recovery as and when the political situation improves, they argue. “The progressive reduction of uncertainty in the next few months could bring with it a fresh increase in home sales,” they conclude.