Spanish home sales inscribed in the Land Registry increased by 13% in September 2017, though weak figures in Catalonia show that the constitutional crisis is taking its toll on the region’s housing market.

There were 34,882 Spanish home sales inscribed in the Land Register in September (excluding subsidised home sales), and 38,610 if you include homes subsidised by the Government, known as VPO. Compared to the same month last year, Spanish home sales were up by 13% (excluding VPO), all according to the latest figures from the National Institute of Statistics (INE).

13% sounds like strong growth, but it is comparatively weak compared to most other months this year, and might be due to worries about the independence drive in Catalonia undermining demand – especially foreign demand – in a region where sales growth has been particularly strong all year.

Bear in mind that the INE’s figures are based on sales inscribed in the Land Register, which typically takes place one or two months after sale, so these figures lag the market by a few months. Sales inscribed in September were actually completed in July and August, or even before.

New and resale property transactions

Home sales in September were divided between first-time sales / new homes with a market share of 18% (7,053) and resales with a market share of 82% (31,557). Sales of both new and resale homes increase in September, with new home sales up 16% – the first time since the boom years that new home sales have increased more than the resale market for two consecutive months. The Spanish new home market is slowly coming back to life.

Spanish Home Sales by Region – Sept. 2017

Residential property sales are up strongly in almost all Spanish regions of interest to foreign buyers and investors, but only if you look at the year-to-date figures, comparing sales in the first nine months of this year with the same period last year.

If you look at just the sales figures for September (next chart), you see that sales growth was noticeably weak in the Catalan provinces of Tarragona (home to the Costa Dorada) and Barcelona, and even negative in Girona province (home to the Costa Brava).

Up until now, Catalonia has been one of the most dynamic housing markets in Spain (as you can see from the year-to-date figures), so the only way to explain this sudden drop in buyer activity in Catalonia is investor confidence being undermined by the Catalan independence drive. Confidence might return if regional elections in December remove the Catalan separatist parties from power in the autonomous regional government.