Another month of declines in property sales in Spain
Data issued by the INE statistical office in Spain showed another month of decreased property transfers.
Because the data is taken from land registry rather than at the date of actual purchase and the process can take up to three months, February is probably the last month where year on year figures will have been affected by the rush of Spanish Nationals to complete on purchases before tax breaks were withdrawn in early 2013.
House sales for residential property fell by 16.1% against January 2014 and by 27.8% against February of 2013.
The annual decline for the first two months of year is 25.3%.
House sale data shows some positives
Whilst on the surface this is not good news there are some signs that in pockets things are picking up.
The Canary Islands actually showed a 5% increase for the month and Valencia, Balearics and Cataluña outperformed the mean average.
Because the data is taken from land registry, and is taken by numbers of sales, it does not take into account what type of residential property is selling and at what prices. It is clear that within the National market sales remain sluggish with few Spanish having the confidence to consider buying in the current economic climate except in circumstances where it is necessary. This is having a big affect on the overall numbers but is not the entire picture.
Whilst in the month of February sales of rural properties was down, the yearly figures show a healthy 9.9% growth. There has been in the last few years an exodus from Cities back to the country as the young Spanish who moved the other way during boom times have gone back to their roots.
What properties are selling
Information from the luxury end of the market from agents like Engle Volkers, in a recent radio show on talk radio, indicated that sales both last year and this year are at their highest level for some 10 years. This is due to realistic pricing at the top end of the market and a belief by foreign buyers that at this end of the market prices have stabilized.
Can you get mortgage finance
The mortgage market in Spain has started to open back up in 2014 and whilst criteria’s remain tight there has been movement on product terms and a more aggressive approach to securing new mortgage applications. Particular nationalities are being favored by the Banks with the Scandinavians being the most sought after applicants.
Who is buying in Spain
Buyers from other countries are increasing as reports trickle through from investment funds and ratings agencies of a view that by 2015 we will have hit the bottom of the price curve.
Possibly spurred on by investment in Spain by well known investors from the USA, there is an upturn in American buyers.
Changes to UK tax rules on how long an offshore worker can stay in the UK, without having to pay tax, is also encouraging a number of offshore workers from the middle East and Africa to consider Spain. Close to the UK and easily accessible, along with significantly reduced prices, lawyers in the Costa del Sol are reporting an upturn in these types of buyers requiring legal services.
Bank owned properties
Bank owned properties do continue to flood the market at the middle to lower end of the price bracket but whereas a couple of years ago these were held at unrealistically high prices, buyers looking for bargains can look at the Bank owned market as well as private sales now.
Areas like Murcia heavily hit by over supply at unrealistically high prices are now becoming sought after again as prices for a very reasonable 2 bed apartment are below the 100k mark.
Transfer of property at repossession
Unfortunately one area reported by the INE, which is other transfers and includes the transfer of a property from the current owner to a Bank under repossession, continues to climb. In the others pot there was increase in numbers of properties transferred by 16% within the month and is up 2.1% since the beginning of the year