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Notaries saying year on year sales down by 9.8% and prices down by 10% in July 😯
Registry and INS data still shows rises, but they tend to lag.
Notaries put it down to effects of end to desgravación affecting last year’s data (but desgravación ended 6 months before then?)
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I discuss this in the blog: Spanish home sales and price tank in July
Where did you hear about the notaries blaming it on the end of the desgravación? That doesn’t make any sense. I read their press release but didn’t see any mention of this. They just said it might be a one off.
I think part of the story is a structural shift towards resales that are cheaper as the supply of attractive new builds runs dry. Maybe people aren’t buying because they can’t find what they want.
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The Swiss bank UBS along with Moody’s credit agency have this week painted a downbeat future for Spanish property. A prediction I personally have always maintained in my postings on here since the market imploded.
UBS collective predictions come from a group of economists, sociologists and various other specialists in market predictions. They maintain that Spanish property is currently close to the bottom in market value and will now stagnate for the next fourteen years.
The demographic reasons for such a prediction are in my view sound. Spain has suffered economic decline on a catastrophic scale. Unemployment is almost now the norm. The population is declining as Spanish people emigrate to find work and a better future.
Historically that’s nothing new. Spanish workers like the Irish don’t sit around bemoaning their plight. They get off their backsides and go where there is hope. Or at least they who have ambition and drive do. In other words the cream of a generation become lost to their nation state.
Another barrier to any market revival is the prospect of higher interest rates across the board, not just in the UK or USA but in Europe itself eventually. Higher property taxes, deflation in Europe, over supply not utilised, rising maintenance charges and utility standing charges and death duties are all factors acting as a brake on investment.
In fact property investors such as I have abandoned the market completely, not just in Spain but everywhere else with the exception of the UK. Here the market remains buoyant and rewarding and likely to be so for some time.
UBS are unique in that they base some of their predictions on demographic factors such as the declining and aging working populations. If you study the numbers in comparison the other states it’s clear this factor alone has the potential to be devastating to the domestic Spanish property market.
Back in 2008 Mark wrote a piece regarding another UBS prediction which reading it now seems a very conservative estimation but none the less very close to what actually happened. I see every reason to accept this new UBS estimation of property stagnation and in my view with the potential of lasting as long as twenty years.
The truth is that for foreign buyers the prospect of loss on any investment over that period of time must be unacceptable and a serious barrier to investment to the thinking adult, even for vacation homes. Loss will manifest itself in increasing overheads and lack of capital growth, not even enough to mirror inflation. That level of overhead cost cannot be justified by any equation or self justification you care to make. You may be able to sell a property for what you paid for it in twenty years time but what’s the purpose in that?
Spanish property and all the hyperbole which surrounds it is truly dead. Let it be given a decent burial and put in a place where it can no longer do ordinary people such harm.
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It was in the Idealista article, which I found hard to read so I may have misread it:
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por su parte, el precio promedio por metro cuadrado de las viviendas unifamiliares se situó en los 964 euros, experimentando así una caída del 7,6% interanual
según los notarios, las caídas de precios y de las compraventas de viviendas en tasa interanual “era esperable a medida que se va desvaneciendo el efecto base por el fin de la desgravación fiscal por vivienda habitual”
los préstamos hipotecarios para la adquisición de una vivienda crecieron un 17,4% en julio. pese a ello, su cuantía media se redujo un 7,8% en términos interanuales hasta los 108.328 euros
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