NOTARIES: Spanish home sales up 17.5% in May

Annualised change in Spanish home sales (left) and house prices in €/m2 (right)
Annualised percentage change in home sales (left) and house prices in €/m2 (right). Click to enlarge.

There were 47,145 homes sales witnessed by Spanish notaries in May, an increase of 17.5% compared to the same time last year (13% if seasonally adjusted).

Last month the notaries released figures for April showing a decline of 2% in home sales, so as I wrote then the figures can be volatile, and one month’s decline is not enough to talk of a change in the trend towards growth. Spanish home sales as reported by the Notaries’ Association have grown almost every month since the start of 2014, and May’s figures confirm that trend is still on course. As I said last month “I suspect the market has just paused for breath in April, and will return to growth in the coming months. Nothing has changed on the macroeconomic front to the recovery in sales has run out of steam just yet.”

When you strip out subsidised housing and look just at the free market, flat sales were up 19.2%, with resales up 20.4% and new home sales up 6.5%.

The average price of homes sold in the month increased 0.3% to 1,318 €/m2, with flats up 1.6% and single-family homes down 3.5%.

Excluding subsidised housing, the price in terms of Euro per square metre of apartments sold was 1,448 €/m2 for resales, and 1,798 €/m2 for new homes.

That still leaves Spanish home sales around 40% below where they were in 2007, and prices 30% below.

2007 is not a healthy benchmark because it was the top of the real estate bubble, but it still helps to show how far the market has fallen. If and when sales get back to 20% below the 2007 peak we can talk of the market having fully recovered.

I recently reported home sales figures from the National Institute of Statistics (INE) showing home sales in May up 25%. Why the difference? Because the INE’s figures are based on sales inscribed in the Land Register, not sales that took place in the month. The INE’s figures lag the market by a month or two, whilst the notaries’ figures report actual sales in the month.

New Spanish Mortgage Lending In May

New residential Spanish mortgage lending rose 11.7% in May, whilst the average new loan value fell 2.6% to €125,738. Roughly half of new home purchases involve mortgage financing.

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