Housing market shrinks for eleven consecutive months as sales fall in August

Is the Spanish property market in trouble after eleven straight months of falling sales? Not at all. What’s happening is a soft landing in the wake of last year’s boom.

There were 35,287 home sales witnessed by notaries in August, down 17pc on the same time last year, according to the latest figures from the Spanish notaries’ association, illustrated in the chart above.

Sales have fallen on an annualised basis for the last eleven months, and the trend has been mirrored in all regions of most interest to foreign investors, as shown in the next chart.

Looking at the year-on-year change in regions some have been more resilient than others. Declines this year have been the biggest in the Balearic and Canary islands, and smallest in the Valencian region and Murcia, with Andalusia and Catalonia in the middle, as illustrated in the next series of charts.

However, if you look just at August, this was one of the best years on record, as illustrated by the final chart. Recent declines are only realised in comparison to the post-pandemic boom in 2021 and 2022, whilst compared to any other August since 2007 sales were higher. A soft landing despite headwinds like higher borrowing costs and political uncertainty remains the story for now.