This is a website for buyers, owners, and sellers of property in Spain, offering reliable information and resources to help you get things done with confidence. It is run by Mark Stücklin, author of the Spanish Property Doctor Column in The Sunday Times (2005-2008), and the book ‘Need to Know: Buying Property in Spain’ published by Collins.
As expected, the Spanish home sales figures for March look great compared to last year, but they also look good compared to 2019, suggesting that the recovery might be more than a flattering comparison with the depressed months of lockdown.
As illustrated by the chart above, there were 59,692 home sales recorded by the Association of Spanish Notaries in March, up 84% year-on-year, and 47,332 sales inscribed in the land registry, according to the National Institute of Statistics (INE), up 36%. See bottom for more detail on the difference between the two sources.
The next chart shows the year-on-year change in sales figures from both sources. You can see how sales recovered over the summer of 2020 to somewhere near the levels of the previous year, before taking off in March, as the base period starts to coincide with the Covid-19 lockdown months last year.
Comparing sales this March, when life was more normal, with sales last March, when the whole world was confined to barracks, gives a distorted result that should be interpreted with caution. The 84% increase we see in the figures from the notaries doesn’t mean the market is booming.
As I wrote last month, “The next few months should deliver some deceptively rosy figures as sales are compared to the lockdown months of last year. I expect to see sales up between 20% and 50% in March, April and May, but the increases won’t be genuine.” I was right about the rosy figures, but underestimated how rosy they might be.
However, if you compare March sales to 2019, long before anyone had heard of Covid-19, we still see an increase of 15% in the notary figures, and 10% in the INE figures, as illustrated in the next chart.
Increasing sales compared to 2019 is an encouraging sign. For one thing, it reveals more than just a flattering comparison with a depressed base period. More than that, it suggests the market might have strong enough foundations to recover from the coronavirus pandemic without permanent scarring.
On the other hand, there may still be some pent-up demand around from last year making the picture look more positive than it is, and the pandemic is still a big menace. I also worry there is an economic crisis lurking in our path like an iceberg, which we won’t really know about until we hit it. The Spanish macro figures like GDP, public debt, the deficit, and unemployment are all very ugly, with one of the worst economic outlooks in Europe. So plenty to worry about, but the March figures are reassuring nonetheless.
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.
picky says:
Interesting Mark, we recently sold our property in Almería at a very attractive price, just to move on. The intention was to then buy something bigger in the Canaries . On getting here we found the market to have moved very quickly from lockdown nothing stage, to full on demand, this is in the villa’s marketplace. It seems to be largely European buyers driven rather than British buyers, but I have heard there are also British who are buying over video tours only. What seems to be the case, is that the supply of new to market villa’s and detached houses with gardens and outside space to sell is tiny, whilst the demand to buy these villa’s and detached houses with gardens is very high. Normally that means only one thing, but maybe not. As you thought this demand could be just a blip and it will level off, time will tell. I don’t know about the apartment market, but it seems lockdown changed what folks want to buy, gardens and that outside space seem to be in very high demand currently. I have also noticed some sellers of such properties are also putting very inflated prices on properties, these do not appear to be selling at all. But sensibility priced slightly inflated priced properties are. This suggests there are plenty of buyers for reasonably priced good properties, but they are not interested in getting caught up in a race to buy and create price wars. Also I have watched the market and the banks are drip feeding the market with these types of bank owned properties, increasing the price by 10% or so once the previous one sold successfully, they are not releasing properties they have in huge numbers at all. Interesting times, it’s still hard to predict what will eventually happen, but to me right now it’s looking like there are plenty of buyers out there of many nationalities who will buy, but are selecting the right property and at a price that is sensible but slightly inflated. Will the British also return in high numbers once again to fuel the marketplace even more? We will see shortly once they can get out into the marketplace again.
Mark Stücklin says:
Very interesting comment Picky. Thank you.