WITH one month to go before the full year figures are in it’s already clear that 2015 was the year the Spanish property market bounced back to life after seven years of crisis.
There were 25,979 home sales inscribed in the Property Register in November (not counting subsidised housing), up 15% year-on-year, and much higher than the 4% growth in sales recorded in October, suggesting that the market expansion is ?back on track for now.
On an annualised basis home sales increased every month in the year to November, with an average monthly growth of 12%, according to figures from the National Institute of Statistics (INE).
?In the first 11 months of the year, there ?were 293,100 home sales, up 11% on the same period in 2014, when the market bottomed out.
New vs. resale
Once again the market growth in November came from the resale business, up 33% year-on-year, compared to a 28% decline in new home sales. Resales now make up 80% of the market, down from parity at the start of 2014.
The home building business in Spain is slowly coming back to life, but this trend of growing resales and declining new home sales will continue for some time to come.
Out of a selection of regions most relevant to foreign investors, Barcelona enjoyed the highest growth in sales in the first 11 months of last year, up 20% compared to the same period in 2014, followed by Valencia (+15%) and Cádiz (+15%).
Spanish home sales were clearly up last year, but the picture was less clear when it comes to house prices. Some sources show prices rising, whilst others say the opposite, though in all cases the differences are quite small. The latest data from two sources show prices more or less stable in 2015. Figures from Tinsa, a leading appraisal company, say the average price fell 1.8% last year, whilst the asking price index from Idealista, a portal, shows the average price down 2%. Location made a big difference, with prices rising as much as 9% in Barcelona, hardly budging in Valencia city (+0.6%), and falling by 10% or more in some cities in the interior.
The trends in home sales, mortgage lending and house prices all look positive for the year ahead, especially in prime city areas and resort towns in coastal areas. It is likely that sales and prices will continue to increase in those areas, with new home building making a comeback as well.
However, risks remain, especially in areas that depend more on local demand, as the Spanish economic recovery still looks fragile, and political uncertainty is now part of the mix since a recent general election failed to deliver a working majority to any party. Foreign demand could be affected by a weaker pound taking the wind out of the British market, or by clouds gathering over the global economy. On the other hand, the increasing perception of risks around the world could work in Spain’s favour, making it look like a safer bet for tourists and second-home investors.