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Home sales back to pre-crash levels

Quarterly Spanish home sales.
Quarterly Spanish home sales. Blue = total, yellow = resale, blue = new. Source: Registradores

Spanish home sales have been recovering robustly this year due to the boom in sales of resale properties. In Q2 this year, 199,408 properties were sold of which 99,343 were resale, according to the Spanish Land Registrars’ Association. The figures bring resale transactions to their highest level for almost ten years, and sales at the end of June were back at levels seen in 2007, before the property bubble burst.  

A total of 113,738 sales of resale and new-build properties took place in Q2 this year, 5,670 more than the same period last year, representing an increase of 4.99%. “To find quarterly property sales figures higher than those in Q2 2017 we have to go back to Q1 2011,” said the Registrars Association report published earlier this month.

“This situation clearly shows the intensification of property sales and highlights that the market’s strength lies in demand,” said the report. Recovery is, however, based on just one pillar of the market – resale properties.

New home sales still depressed

At just over 20,000 transactions, completed new home sales are a long way from the 110,000 units sold at the height of the property boom. “Resale properties are what sells because they’re available. New properties just aren’t being built,” says Fernando Encinar, co-founder and head of research at the property portal Idealista. “Building property is out of fashion. It seems as if it isn’t good to build, yet in certain areas it’s needed. It’s certainly true that there’s some unsold supply at national level, but it’s in areas where there’s no demand.” Encinar points out that in cities like Madrid and Barcelona, where there is demand, building licence concessions are practically at a halt. “And if building doesn’t start, prices will start to move sharply upwards.”

As a result of the continuing dearth of completed new homes for sale, the overall market is still much smaller than it was in the last period of expansion, when total home sales per quarter were running around 250,000, compared to 114,000 today. Off-plan sales are not included in these figures.



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