BBVA Research, part of the BBVA banking group that is one of the biggest in Spain, points out that the Spanish property market is cooling down, with no obvious change of direction in sight.

A new memo on the Spanish housing market just published by BBVA Research notes that “home sales are showing a certain sluggishness, despite the fact that conditions remain favourable.”

They add that “the variables related to construction activity do not point towards any big gains in the next few months.”

BBVA Research point out that home sales grew just 1% in April according to data from the Association of Spanish Notaries (though sales were up 4.5% seasonally adjusted) and argue that “uncertainty continues to have an impact on home sales, which show scarce signs of dynamism in recent months, and high levels of disparity between regions.”

The growth in new mortgage lending is also slowing down, they point out, describing it as “practically stagnant, despite the fact that we are in a financial context that is still promising for the sector, given the low interest rates.”

Other measures they give pointing towards a perceptible slowdown in the Spanish housing market include a fall in the number of land deals closed in April, and the first fall in construction jobs in 39 months.

Despite a slowdown in home sales, land sales, and construction employment, BBVA Research forecast that house prices will continue rising between 3% and 5% depending on local market conditions.

Since about January I’ve been flagging up the signs of a slowdown in the market in my monthly articles on Spanish home sales. Given how far the market and sector crashed between 2008 and 2014, it strikes me as too early for the recovery to have run its natural course. I suspect politics and bad policies are holding back demand.