Spanish housing market consolidates expansion in 2017

spanish property market

Spanish home sales inscribed in the Land Registry were up by 16% last year, the fourth and biggest consecutive year of growth, according to the latest figures from the National Institute of Statistics (INE), based on data from the Land Registry.

There were 418,915 Spanish home sales inscribed in the Land Register in 2017 (464,423 if you include homes subsidised by the Government, known as VPO). Sales in 2017 were 16% higher than the previous year, and above the 400,000 mark for the first time since 2008, when the last boom was coming to an end.

Looking at just December, sales were up 8% to 28,878 excluding VPO, the highest level since December 2008.

The Spanish property market has moved from a timid recovery in 2014 (+4%) to a robust expansion in 2017 (+16%), and all the signs, with the exception of a constitutional crisis in Catalonia reducing sales in that key region, point towards more of the same in 2018. It’s difficult to say how much the Catalan situation will undermine growth, if at all. I’ll look at the sales figures from Catalonia in depth in another article.

spanish property market change in sales 2017

New and Resale market segments

spanish property market 2017

The recovery in new home sales began last year with sales up in 10 out of 12 months and up 10% in the year, the first increase in at least a decade. But growth in new home sales is coming from a low base, and new homes are still under 20% of the market, so in theory there is room for growth in a country like Spain, where the quality of much of the existing housing stock is not very good.

Spanish home sales by region – 2017

spanish property market by region 2017

Looking at selected regions where foreigners tend to buy, sales rose the most in Andalusia’s Granada province, home to the Costa Tropical, up 27%, and fell in just one region, neighbouring Almeria province, also in Andalusia, down 6%. The two big markets of Alicante (Costa Blanca) and Malaga (Costa del Sol) were up 17% and 15% respectively, whilst the Balearics were up 14%.

Catalan provinces like Tarragona (+17%), Girona (+16%), and Barcelona (+16%) did well on a yearly basis, though if you look at the figures for December alone, it’s another story, and one for a separate article.

All in all

2017 was a positive year for the Spanish property market in terms of sales, with the market driven by economic growth at home, rising employment, tourism, mortgage lending and foreign demand. Brexit and the Catalan constitutional crisis were not enough to derail the recovery last year, though growth would have been undoubtedly higher without them.

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