The total lockdown month of April saw the inscription of sales deeds down by 38%, according to a communiqué from Spain’s Association of Property Registrars.
There were 25,483 homes sales inscribed in the Land Registry in April, compared to 41,283 the same month last year, an annualised decline of 38.3%.
Residential mortgages were also down significantly, but not in the same league as home sales. The number of new residential mortgages recorded fell from 29,137 in April 2019 to 24,353 this April, a decline of 16%.
Looking at the regions most popular with foreign investors (see chart above), the Canary islands were hit the hardest in April, with a decline in home sales inscriptions of 61%, whilst the Balearics fared the best, down 28%. Before the coronavirus crisis struck the Canaries were one of the best performing regions in terms of sales growth this year.
The registrars point out that the 22% increase in new mortgages in Murcia can be explained by a one-off decline last year, and probably doesn’t represent any real trend.
It’s worth noting that the figures published by the registrars do not correspond to sales in the month, but rather to sales deeds inscribed in the month as a result of sales in the preceding one or two months. The decline they portray will be partly as a result of fewer sales in February and March, and partly as a result of the lockdown in April preventing sales being inscribed by lawyers and registrars.
We will have to wait until the notaries publish their home sales figures for the months to see what really happened to Spanish property sales in April. I expect the decline in sales witnessed by notaries to be more dramatic than the decline in sales inscribed in the Land Registry.
Finally, it comes as no surprise to see big declines in the Spanish property market figures for April and May, whichever figures you look at, because those were the months during which Spain imposed one of the tightest lockdowns in the world. Much more interesting will be to see how sales perform in the months after the lockdown has been lifted, as that will reveal how the market is coping with the shock, in particular the economic shock.
Judging by the way the US economy is confounding expectations with a fast recovery in jobs, the situation in Spain might also turn out not as bad as feared.
Spanish home sales figures come from two official sources: 1) The Association of Spanish Notaries based on sales witnessed by them in the month, and 2) The Institute of National Statistics (INE) based on sales inscribed in the Land Register by the Association of Spanish Land Registrars.