Spanish home sales figures released for September 2019 show the market going through a period of weaker demand, though the figures also suggest the decline might be temporary.
Association of Spanish Notaries
Data from the Association of Spanish Notaries reveals that Spanish home sales declined heavily between May and August compared to the same months last year, but settled down in September with sales returning to the same level as before.
What might have caused the fall in sales? The market is facing a variety of headwinds at present, which I’ll discuss at the end of the quarter. The most obvious cause of the decline in June and July was the introduction of a new mortgage law that held up sales due to the confusion surrounding its implementation. The figures from the notaries show declines narrowing over the summer, and disappearing in September. If that trend continues the market will be growing again in the last quarter.
Association of Spanish Land Registrars
The number of Spanish home sales inscribed in Spain’s Land Register in September for sales completed in the proceeding months was 34,493 excluding VPO subsidised housing sales, down 11% in a year. That’s the second consecutive month of double-digit declines in these figures, which lag notaries’ figures by a few months. Declines should narrow and disappear over the next few months, following in the steps of the data from the notaries.
New home sales declined by 20% whilst resales were down by 9%, which fits the explanation of the new mortgage law holding up sales – mortgages can be trickier to arrange for new homes than existing homes with a track record.
Spanish home sales in September 2019 by region
By region, sales were down in almost all areas of interest to foreign investors, with the exception of Murcia (+2%) and Valencia city (no change). The 20% decline in Málaga province, home to the Costa del Sol, is noteworthy, as that is one of the most popular areas with foreign buyers, especially British buyers. A decline in foreign demand will be part of this story.
Year to date the picture is less negative, with sales down in just over half the selected regions led by the Canary islands, in particular Tenerife. Sales were still slightly positive in Catalonia in the year to September, but it’s possible sales in the region could be hit in the last quarter by the flare up in political tensions.