Spanish home sales figures published for March 2019 shows sales inscribed in the Land Register up 8% in March (if you count subsidised housing, 9% if you don’t) according to figures from the National Institute of Statistics (INE), whilst sales witnessed by notaries were down 2.9% compared to the same month last year. In both cases the figures are lower than they have been most months in recent years.
Though both sets of figures relate to March, they correspond to sales that took place in slightly different periods. The notary figures refer to sales completed in March, whilst the Land Registry figures refer to sales inscribed in March, but completed in the previous few months. As such the notary figures are more timely, but as I have pointed out before, they are surprisingly volatile, and often significantly revised months later, so I prefer the figures from the INE when it comes to understanding the trend.
INE Spanish home sales figures for March 2019
The following two charts illustrate the figures from the INE (based on data from the Land Registry) for Spanish home sales inscribed in March 2019, and how they compare to the same month in the last four years.
There were 38,464 home sales inscribed in March excluding subsidised housing known as VPO (42,649 including VPO), up 8% compared to last year, but growth, though on the rise, was not as robust as it has been in most months since the recovery began. Judging by the INE’s figures, it looks like the Spanish property market is going through a soft patch at the start of this year compared to the last 12 months (next char), and especially compared to the last five years (following chart).
New and resale home figures March 2019
Resales were up 6% and new homes sales up 14% (not including off-plan sales). New home sales have increased most months since the start of 2016 but not enough to get anywhere near the level of new home sales in the boom years more than a decade ago. This is largely because the supply of new homes is still limited by financing constraints and planning delays for developers, rather than a lack of demand for new homes.
Spanish home sales by region – March 2019
Regionally sales were up in most areas of interest to foreign investors with the exception of the Canary and Balearic islands, where homes sales have been falling now for months. Sales were also down in Alicante province, home to the ever-popular Costa Blanca. It’s a similar picture in the year to date.
Homes sales have now been falling in the Balearic and Canary islands for months. Why? It’s a question I will have to look into.
Notary Spanish home sales figures for March 2019
The home sales figures from the Association of Spanish Notaries based on sales witnessed by its members shows sales down 2.9% year-on-year to 50,659 in March, and even though these figures tend to be revised significantly after they are published, the trend in the chart below (left) is clear to see – the growth in home sales is on the decline. The chart on the right shows the change in house prices, which grew a moderate 1.7% in March continuing a positive trend of gently rising prices.
If the notaries are right, and home sales fell in March confirming a trend of declining growth, why might that be? It could be that the pent-up demand from the crisis years has now largely run through the market, and it could be that many people who would like to buy cannot get financing as banks are still being cautious about mortgage lending. Political uncertainty at a national, regional and municipal level might also give some buyers cause to wait and see. Or it could just be a lull before the market returns to double digit growth in the summer months.