Spanish conveyance Solutions SpainProperty purchases for Spain in December 2013.
Data out for the month of December on transfer of property rights in Spain showed a small decline from the same month of the previous year.
Does this mean property sales are continuing to fall.
Whilst the headline figure would indicate that those buying in Spain continue to decline the figures are not as bad as the initial first glance may indicate.
Sales from December 2012 to December 2013 fell by 0.50% across all types of property types and by 3.6% for residential dwellings.
The first positive is that this means commercial sales are in fact improving which is good news for the underlying economy. The monthly data shows all property transfers as a headline figure and behind this it is broken down into a number of categories.The key data covered in this report is for the sales of residential dwellings.
The second positive is that whilst the drop in residential sales is slightly more pronounced due to a rush for completions in 2012 before tax breaks finished, the fact that the drop is a small as 3.6% should in fact be read as a positive as there was no unnatural incentive in place to cause an upturn in sales.
it was in fact expected that sales in December 2013 would be below those of 2012 which had in turn shown a significant increase in sales from 2011.
At ground level most Estate Agents are reporting a significant upturn in serious enquiries with buyers appearing to be ready to commit to Spain now there is more stability in the economy and the threat of Spain leaving the Euro has diminished.
Are there any other indications the market in house sales is stabilizing.
The month of December 2013 showed that there was an increase in the variation between sales of residential property in the month of November to the month of December. In simple terms more homes sold in December 2013 than November 2013. This is the first time for at least 5 years that this has been the case.
Separate news also showed that for the first time since the economic crisis began sale prices edged up slightly. Whilst there was a small increase in the sale price of property it was also recorded that prices at which the properties finally sold was often 30% or more than the original asking price.
Total house sales did decline for the full year but the decline has slowed significantly.
Spanish Banks have also in a response to more positive market conditions put in place lending targets for 2014 making it easier and more cost effective for buyers in Spain to gain Spanish Mortgages.
A general cleaning up of the overall market has taken place over the past few years making buying in Spain a safer option than previously through from the quality of the selling agents, the level of legal protection when buying in Spain and enhanced and more transparent controls over building regulations.
Where were the highest level of property sales
The region of Madrid for the first time in years showed a significant upturn in sales in December. These figures could be in part a reflection of large chunks of property being sold by SAREB the bad bank to investment funds. The investment funds have tended to focus their purchases on the Capital city and have bought large tranches in the last few months.
The coastal areas which until now have held up better all showed a decline. This is however normal market activity as buyers in the Coastal areas are made up heavily from the international markets who historically avoid the last couple of months of year. This trend is part of the natural sales cycle except for last year when the non resident buyers pushed completions through to gain the tax breaks on IVA and future Capital gains.
So are we seeing a recovery in Spain.
The indications are that the buying in Spain of residential property has stabilized. There remains a number challenges and it is unlikely we will see the market start to boom with large increases in property sales through 2014.
It can be however be anticipated that 2014 will show a regular and sustained improvement over 2013 and that activity will continue to increase as the year progresses.
Holding back some of the good news and recovery is the fact we are still seeing large numbers of property transfers being made up by the transfer of property rights to Banks in a repossession situation. In this area the annual accumulated increase in 2013 from 2012 was 13.8% and was the only area to show an increase throughout 2013.
The continuing issues relating to repossessions will dampen the pace at which prices rise and potentially have a knock on affect on the level of sales of private properties as Banks continue to aggressively try to offload stock.
It may well be well into 2015 before we see more natural conditions prevail and a sustained recovery in house sales and prices but all the indications are that we have hit rock bottom and are starting in Spain to claw our way back to normality.
For those buyers wishing to make an investment or for buyers looking for the perfect bargain holiday home 2014 could be the optimum year to buy.