Spanish residential property sales data published for April 2019 shows home sale deeds inscribed in the Land Register down 2.3% in April (if you count VPO subsidised housing, 3.4% if you don’t) according to figures from the National Institute of Statistics (INE). Home sales figures from the Association of Spanish Notaries based on sales witnessed in the month show sales rising by 1%. All the data points towards a slow down in the Spanish property market, which has been recovering since 2014.

Though both sets of figures relate to April, they correspond to sales that took place in slightly different periods. The notary figures refer to sales completed in the month, whilst the INE / Land Registry figures refer to sales inscribed in the month, 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.

There were 36,644 residential property deeds of sale inscribed by the property registrars in the month, down 3% in a year, and 41,049 if you include VPO subsidised housing to get the overall market, down 2%. The first two charts illustrate the April figures, and how they compare to the same month in the last four years.

However, we have to consider that Easter fell in April this year, compared to March the previous year, and registrars don’t work on public holidays, so the regional and national holidays between the 18th and 23rd of April would have reduced the number of working days for inscribing sales in the month. That should at least partly explain the decline in Spanish home sales figures inscribed in the month and published by the INE.

The seasonal effect of Easter notwithstanding, the breakdown between new homes and resales shows the former up 8% and the latter down 4%, resulting in an overall market decline of 2% as mentioned above. New home sales have grown in double digits for most of the last twelve months, and will continue to do so in the absence of seasonal factors as more new developments are completed and delivered.

The next chart shows the annualised change in sales each month for the last five years, and illustrates how sales have been growing every month with the exception of Easter month in the last three ears. That’s seasonality for you.

Spanish home sales by region – April 2019

Even allowing for seasonality April wasn’t a good month for the Canary islands, where sales were down 21%. Sales were also down in double-digits in Madrid, the Balearics, and Girona, home to the Costa Brava. And sales in Alicante, home to the Costa Blanca, a perennial favourite with foreign buyers, were down 9%, and Malaga and the Costa del Sol down 7%. These numbers are too big to be explained by seasonality. Perhaps something else is going on.

Looking at the picture year to date, the declines are less widespread, but still harsh in the islands, and -10% in Alicante. Lower sales on both the Costa Blanca and the Costa del Sol, where foreign buyers are a big part of the market, suggest that maybe foreign demand for second homes on the Spanish coast is starting to cool.

Notary Association’s Spanish home sales figures for April 2019

The home sales figures from the Association of Spanish Notaries based on sales witnessed by its members in the month shows sales up 1% year-on-year to 50,172 in April despite working days lost to Easter, and even though these figures tend to be revised significantly after they are published, the trend in the chart below (left) clearly shows the growth in home sales on the decline in recent periods. The chart on the right shows the change in house prices, which lurched down by 1.7% in April, the first negative result in months.

Looking at the notaries’ figures as an index based on July 2007, when the real estate boom was at its height (and so arguably not a good base year), sales have recovered to around 70% of what they were (up from just 30% in 2012), and prices are around 75% of what they were, up from around 65% in the period 2012 to 2016.