An interesting piece of analysis from the property portal Idealista shows why Spanish new homes sales counted in the official figures are still so low.

After years of declines, new homes sales have been showing the first tentative signs of recovery in recent months, as illustrated by the chart above (based on sales recorded in the Spanish property register, and published by the National Institute of Statistics).

They increased for the first time in years in April and May, but fell back into negative territory again in June (-1%). Sales levels are extremely low and signs of recovery weak.

But when you look at the latest figures for construction completions, analysed by the property portal Idealista.com (chart below), you can see why new home sales have fallen so much in recent years, and why a more robust recovery hasn’t yet started.

The number of new homes finished between January and May was the lowest since the crash began, and you would have to go back many decades to find such a low figure for construction completions in Spain.

Homes sales can’t be completed and inscribed in the property register until construction is finished and habitation certificates issued by the authorities, amongst other things. So the official figures just reflect the fact that the supply of newly-built homes for sale is dramatically low.

Planning approvals, on the other hand, are rising fast, albeit from a low base, up almost 50% in the first five months of the year, say Idealista. And from what I can tell, new developments in popular areas like Barcelona, Madrid, Alicante, Marbella and Ibiza, are selling well. If figures were available for sales off-plan or under construction, I suspect we would see a significant increase in volumes this year. Sooner or later this will show up in the official homes sales, thought it might still take a few months yet.