2015 first month house sales are up on previous year
Data published by the INE in the last couple of days brings rays of hope to the property market and for sellers of property in Spain. Taken from land registry the figures provide some scope for optimism.
The first bit of good news related to the number of properties sold for the month of January. For sales of homes registered as dwellings the figures show an increase of 9.6% in comparison to January of 2014.
Whilst the sale of homes increased total property transfers including donations, repossessions and commercial property were down 2%. This was not necessarily bad news. Within the data relating to other titles it is including foreclosures and within this area transfer of property was down 8.7%. This is an area of property transfers where a decrease is in fact good news as it suggests the levels of property and households in financial difficulties is in fact receding.
Increasing house sales is good news for the government in Spain as a more buoyant property market brings in much needed direct and indirect taxes.
Types of properties sold
57% of all sales within the month related to the buying of homes.
Whilst the numbers of sales for dwellings was up in comparison to last year the increase in sales between the Decembers to the January was in fact the lowest it has been for the last 5 years. Not too much should be read into these numbers as in previous years some tax breaks had pulled forward many completions to the year end giving a perhaps unnatural blip to the statistics.
New builds as a percentage of total sales only made up 26.9% with resale’s making up 73.1% of total purchases. Resales were up on annual basis by 50.8% with new builds dropping by 37.1%. This is good news for sellers of homes in Spain but not such good news for developers.
Most regions saw an annual increase in the month but the traditional areas for second homes and overseas buyers performed the strongest. The Canaries were up 56.7%, the Balearics 4.9%, Andalucía 6.7%, Murcia hard hit in the crisis 18.1% and Cataluña 14.9%.
In total 61,947 new sales were registered at land registry for dwellings with Andalucía leading the way on house sales at 11,046 units.
The house price index rose 1.8% in the last quarter of 2014 and the price of houses rose 0.2% when compared with the previous quarter. This continues a small but steady upward trend according to the NIE data during the year of 2014 against the previous 6 years when house prices feel considerably.
Resales grew at a slightly higher level than new build prices growing 0.3% when compared to the previous quarter with new builds growing only 0.1%.
Regional price growth
The best growth by region was achieved in the coastal areas and the Islands but the capital Madrid is also showing a slow but sustained recovery in house prices.
The data suggest that the bottom of the market was reached in 2013 and whilst any increases are sporadic and vary from region to region prices leveled in 2014 and look to continue to increase slightly during 2015.
Buying in Spain is now the right time
For buyers of property in Spain who have delayed the buying process until the bottom of the market had been reached it would appear 2015 will be the right time to buy. Not only are house prices now looking to rise slowly but exchange rates for buyers outside the Euro are at the highest they have been for many years.
Mortgage availability is stronger than it has been for many years and interest rates have dropped during 2014.
Whilst it is still tiny shoots of recovery and housing stock remains high there is enough evidence to suggest the trend will continue.