Home sales data for May provides further evidence that the Spanish property market expansion is cooling down nationally, dragged down by sales decline in foreign investor hotspots like the Costa Blanca and Costa del Sol.
Spanish residential property sales data published for May 2019 shows home sale deeds inscribed in the Land Register up just 1% countrywide (including VPO subsidised housing) 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 falling by 5.2% to 52,608 sales in the month (including VPO), the biggest fall in the last three years, and the second decline in the last three months, as illustrated by the next chart.
Though both sets of figures relate to May, they correspond to sales that took place in slightly different periods. The notary figures refer to sales closed in the month, whilst the INE / Land Registry figures refer to sales inscribed in the month, but closed 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 observing the trend.
Going back to the INE’s figures, there were 42,996 residential property deeds of sale inscribed by the property registrars in the month, up 1% in a year, and 47,559 if you include VPO subsidised housing to get the overall market.
The trend is clearly one of lower growth in sales, as the red trend line on the following chart shows.
The number of new home sales was unchanged in a year at 8,305, whilst resales were up just 1% to 39,253
Spanish home sales by region – May 2019
May wasn’t a good month for Spain’s leading coastal destinations the Costa Blanca and the Costa del Sol. Sales were down 12% in Alicante province, home to the Costa Blanca, and by the same amount in Malaga province, home to the Costa del Sol. In the Canaries home sales were down 15% in Las Palmas, where sales have been declining relentlessly for months. If sales are declining in these areas it suggests that foreign demand for Spanish property is cooling down.
On the bright side, sales were up in the Balearics for the first time in months, whilst sales in the Catalan provinces of Girona (Costa Brava), Tarragona (Costa Dorada), and Barcelona were all significantly up too. In Catalonia’s case it’s at least partly due to a recovery in sales as investors discount the Catalan independence drive that scared them off last year, so maybe recovering lost ground rather than breaking new ground.
Year to date, it’s a similar story with carnage in the Canaries, declines in foreign investor favourites Alicante, Malaga, and the Balearics, and reasonable growth elsewhere, especially in Catalonia.
These numbers suggest to me a possible trend towards lower growth in foreign demand for homes and holiday homes on the Spanish costas, unless there is a big switch in demand moving from resales to new developments off-plan that won’t show up in the figures for months to come.