The Spanish property market continues to lose steam, though sales are still strong compared to years prior to the pandemic, reveal the latest figures from the notaries’ association.

This article will look at the latest Spanish home sales data reported by the notaries’ association of Spain (Consejo General del Notariado), how sales are evolving in a selection of regions of interest to foreign buyers, and what factors are influencing the change in sales. This goal is to help people understand what is going on in the Spanish property market with the February 2023 home sales data in hand.

Spanish homes sales in February 2023

There is a clear trend emerging of a post-pandemic bounce coming off the boil, best illustrated by the 12-month rolling total of sales in the chart below. This chart smooths out the ups and downs of monthly sales and gives you a good idea of the underlying trend. As you can see the sharp increase in sales after the slump of the pandemic, which was part recovery and part boom is clearly on the way out

There were 48,445 Spanish home sales in February, down 13pc compared to the same time last, according to the latest market report from the Spanish notaries’ association, illustrated in the chart above.

However, if you compare February sales over the last ten years you see that sales were still strong, even if the boom is coming off the boil. Sales this Feb were the second highest in ten years, only below the boom-high of last year. So far there is no sign of a crash in sales, just an inevitable cooling down after a year of strong growth.

Regional picture

Looking at home sales in regions of most interest to foreign buyers, where foreign buyers account for more than 30% of sales in some regions like the Balearics and the Canaries, sales turned down in all regions, though some more than others. As you can see from the next chart, sales declined the most in the Balearics (-22%), followed by the Canaries (-18%), Andalusia (-17%), Catalonia (-16%), and Madrid (-15%). Sales were down the last in the Valencian region (-5%).

Why are sales declining? 

Sales are only falling compared to last year, when the market was fueled by a post-pandemic recovery of pent-up demand and changing investor priorities coupled with low interest rates. Spain also looked like a comparatively safe investment given the global picture last year. It was inevitable that sales would stop increasing at some point, as all booms have to come to an end.

Compared to the years prior to 2022 Spanish home sales still look strong, but the trend is clearly downwards, and we could see that trend continue until sales no longer compare favourably to years like 2018 and 2019. It all depends upon how strong the headwinds become, headwinds including rising interest rates, and Spanish government policy that deters foreign investment in Spanish real estate.