Property sales in March
Last week saw the latest data on transfer of property rights sent out by the statistical office in Spain.
The monthly bulletin includes all transfer of property at Notary so is not just an indication of residential sales.
Included within the bulletin are sales of commercial property, Rustica property and land. The data also includes those properties that transferred ownership by way of Inheritance, donation and other titles which will include Bank repossessions.
Sales of Dwellings
For March when looking at the purchase of dwellings the figures were marginally up on the year before.
The amount of sales of homes, to either Spanish nationals or international buyers, was up 2.1% on the same month of the previous year. As per the normal trend of the last 5 years sales dropped between the months of February to March and were down by 8.1%. Only last year were March sales above February sales.
Whilst there is signs that a price and volume of sales recovery is close this would appear to be slow and sporadic rather than a sudden and sustained upward trend.
New build levels versus resales
Struggling most, appear to be new builds. 24.2% of all sales of homes were new builds and 75.8% were resales. The number of sales of new builds was down 40.9% in comparison to March of last year. Sales of free housing were up 32.8% and VPO or protected houses were up over 8%.
As the property market has appeared to stabilize in the last few months so developers have started to increase prices. This may have been too early on in the recovery cycle and the sales of new builds are perhaps reflecting the lack of value that in general new builds currently provide. New build sales are at their lowest level for the last 12 months.
With vast stocks of bank properties and used housing still apparent across the market, private owners remain sensible on pricing in order to get a quick sale. There is still plenty of choice out in the market.
Who is buying
Foreign buyers are starting to flock back to Spain. With the general economy improving, prices having fallen by over 40% and the weakness of the euro, Spain is looking very attractive again.
All the reasons for buying in Spain, that have always existed even during the crisis remain. A great climate, more laid back way of life, excellent communications and infrastructure, English widely spoken and reasonable cost and frequent flights are but a few.
Tourist levels are reported as hitting new highs, and are at levels even above the boom years. Spain has started to promote more effectively its interior countryside as well as it beaches and coastal resorts.
The Place in the Sun exhibition held in London the UK a week ago suggests that a wide range of buyers are now seriously considering buying both holiday homes, rental property, and homes for long term retirement.
Why are foreign buyers coming back to Spain
Buyers are buoyed by the fact that prices for a half decent apartment, in some of the coastal areas, now start at around € 50.000. Many potential buyers are pro-actively looking at buying in Spain since the change in the pension laws in the UK have allowed them to drawdown from a private pension up to 30% of the fund value tax free at the reduced age of 55 years. Buying a holiday home abroad for personal use, investment and possible retirement seems to be top of the shopping list for many.
Most potential buyers are now looking at the whole process of buying in Spain with a more sensible and measured approach.
Extensive homework is being done to understand the legal situation of buying a home in Spain so speaking to a lawyer has become one of the first ports of call rather than the last one.
Previous issues including the infamous land grab law and the rather over publicized demolition of homes has made buyers more wary and cautious. This is not a bad thing but the law and process of buying in Spain is very clear and safe as long as it is followed. Even back in the bad old days generally speaking if the buyer appointed an independent Lawyer to work on their behalf, who did the necessary checks in full, there were no issues.
These days all the areas of concern have been dealt with. It is now clear if a property has an official occupation license or not and the implications if one is not held. It is clear if the property has any legal infractions or open files at the Town Hall and the risk of buying something with minor issues can be better measured and assessed before purchase.
Whether buying in Spain will provide the best investment return for those using their pension pots is difficult to say but if you just want to use the money to enjoy the property now and in your retirement then Spain will provide this.