The Spanish real estate sector may be recovering, but activity is still 80% lower than it was in 2004 finds a study by the appraisal company Euroval, based on an index incorporating all the key indicators of activity.

Euroval looked all the main indicators of economic activity in the Spanish real estate sector, such as mortgage approvals, construction investment and income, and property sales, and used them to create a composite index with a base year of 2004 quantifying the sector’s change in economic activity over time, broken down by region (see chart above).

However imperfect, the results help illustrate how dramatic the Spanish property crash has been, and that we are still nowhere near normal. At a national level, activity is still 80% below where it was in 2004, which wasn’t even the peak year (that was 2006). At least the sector has recovered from 13% of its former self in 2014, to 20% today.

The results also help show how unequal the recovery is proving to be. Whilst the sector in the Balearics has recovered to 45% of 2004, in the Valencian Community the sector is still 87% smaller than it was in 2004.

Was 2004 a ‘normal’ year, and therefore a good benchmark for the sector? Not at all. The sector was already overheating by 2004, though how much depends on the region. 2004 was the peak year for Andalucia, which started to deflate in 2005, whilst Murcia increased another 62% by 2006, all according to Eurovals analysis.

You probably have to go back to 2000 or before to find a normal level of activity for a country with a population and housing stock the size of Spain. But whatever normal is, we’re still a long way from it on the downside.