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Some of you may have read that the Spanish property market grew by 27pc in August.
This is what the European Citizens’ Weekly Report (sent to me by email) has to say about the rise in sales:
The Minister of Housing, Beatriz Corredor, reported that sales of dwellings rose 29.6% compared with the same month last year. Has the property market recuperated? Definitely not, and almost all experts agree the statistical increase is artificial.
We can sum up the reasons as follows:
– Sales of dwellings were so paralysed during the summer of 2009 that even a slight movement can produce sensational percentages;
– The important deduction allowance in Income Tax for the purchase of a new dwelling is being withdrawn next year, thus some taxpayers on higher incomes have decided to buy before the end of this year to benefit from the saving (see example of the subsidy on buying a new car);
– The “normal” sale of dwellings resulting from people getting marrying, moving to another place to work, etc. has been almost paralysed for two years;
– A real rally in sales would stop the slow fall in property prices. This has not happened, in September, property prices fell 5.7% on last year and even more in coastal municipalities than in the big cities.
Summing up: The property market continues in its coma. The huge housing stock in the hands of promoters and banks is not diminishing and there is no increase in the purchase of dwellings by private foreign buyers. Property prices must fall a further 15 to 20% before investment in Spanish real estate becomes interesting, and guarantees must be given against fraud and abuses.
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Certainly an artificial rise, most spanish think so and the only people who claim sales are up are estate agents who are away with the fairies spouting rubbish and talking about how many houses they have sold…in their dreams 🙂
More news today of a fall in sales which have dropped 17.7%
http://www.diariosur.es/rc/20101213/economia/venta-viviendas-cifra-baja-201012130943.html
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Mark, an accurate summing up of the true Spanish property market!
Your last para is what we have been asking the Spanish Gov’t to do for years, but this falls on their deaf ears. As you say, prices still need to fall further too.If they seriously wanted to make Spain investable they would do this, they would also need to reduce the excessive completion costs of buying around 10-11% to a more respectable 5% or so. Property would be back on investors’ and normal buyers radar then.
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Mark, an accurate summing up of the true Spanish property market!
Your last para is what we have been asking the Spanish Gov’t to do for years, but this falls on their deaf ears. As you say, prices still need to fall further too.If they seriously wanted to make Spain investable they would do this, they would also need to reduce the excessive completion costs of buying around 10-11% to a more respectable 5% or so. Property would be back on investors’ and normal buyers radar then.
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@mark wrote:
…..and guarantees must be given against fraud and abuses.
At least El Mundo seems to be taking up the baton on behalf of 100+ purchasers from Northern Ireland re. Estepona Beach and Country Club. Six million € in deposits gone walkabout on this so-called development alone, and OVP involvement AGAIN:
http://www.typicallyspanish.com/news/publish/article_28281.shtmlThe article in El Mundo: http://www.elmundo.es/elmundo/2010/12/13/andalucia_malaga/1292224434.html
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Bloomberg reporting to day that sales in October fell to their lowest ever recorded level.
If this is happening now, what on earth is it going to be like in the new year after the tax hike?
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What I said this morning 🙄
@katy wrote:
Certainly an artificial rise, most spanish think so and the only people who claim sales are up are estate agents who are away with the fairies spouting rubbish and talking about how many houses they have sold…in their dreams 🙂
More news today of a fall in sales which have dropped 17.7%
http://www.diariosur.es/rc/20101213/economia/venta-viviendas-cifra-baja-201012130943.html
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