Home » HOME SALES IN JULY: Dead cat bounce?

HOME SALES IN JULY: Dead cat bounce?

The latest home sales figures from the National Institute of Statistics (INE), and the Association of Spanish Notaries, both show the market recovering from lockdown lows, though still far from normal.

The two sources relate to sales in somewhat different periods, and the figures from the notaries are more timely. See the blue box at the bottom of the page for an explanation of the difference between these data sources.

Spanish home sales in July 2020, according to the Association of Spanish Notaries

spanish home sales july 2020

According to the notaries, there were 48,586 home sales completed in July, just 5% below the same month last year, though I make it 2.8% lower based on their own figures. That compares to 70% down in April and 52% in May, so the market bounced back strongly in July, though many sales in July would have been pent up demand that was frustrated in previous months. It’s unlikely the bounce will continue in the last quarter of the year.

The latest figures from the notaries also show that Spanish house prices were down 9.4% as a national average to 1,377€/m2, and new mortgage lending was down 3.3% to 21,441 new loans, with the average loan value down 9.9% to €144,793.

Spanish homes sales recorded in July 2020, according to the Statistics Office

spanish home sales july 2020

Figures from the National Institute of Statistics (INE), based on sales registered by the Association of Spanish Land Registrars, show inscriptions in the Land Registry down 32% to 32,654, including subsidised housing, known as VPO. Excluding VPO, the free market was down 33% to 29,068 home sales inscribed. New home sales were down 21% to 6,767, and resales down 34% to 25,887 residential property transactions.

Looking at selected regions of interest for foreign investors, all areas were down heavily, but some more than others. Sales were down more than half in the Canaries, but just 22% in Murcia.

spanish home sales july 2020

As I explain below, these figures from the registrars look back at sales completed in the months before, so they don’t reflect, to the same extent ,the recovery seen in the notary figures, which should show up in the months to come.

There is not much of a trend to watch in these figures. Like everything else, nothing is normal. It will take months, or even years, to find out what lasting impact Covid-19 has had on the market. In the meantime, all we can see is a big fall in the second quarter with lockdown, some recovery in the third, but where we go from here is all guess work. My fear is that this turns out to be a dead cat bounce, as the coronavirus continues to play havoc with Spain. I expect sales will be down 20% or more for the full year.

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