'Mild' Recovery of the Spanish Property Market
November 27th, 2009
The market for new homes is on the road to a mild recovery, claims the G-14 group of Spain’s leading developers. Sales of newly built homes will continue “consolidating in the coming months” said Pedro Pérez, head of the G-14.
There is some basis for the developer’s optimism in the latest sales figures from the National Institute of Statistics. Sales of newly built properties increased by 7.6% from August to September, though on an annualised basis sales were down 20%.
“It’s been comforting to see sales rise for the 5th consecutive month, something that means we can say that the sector is recovering since it touched bottom in April,” Pérez told the Spanish press.
Sales are bouncing back thanks to lower prices and more selective mortgage lending by banks, argue the developers.
The recovery in sales will continue in the months ahead, says Pérez, in part because developers will make “every effort possible” to make Spanish property prices more attractive.
The latest monthly home sales figures are out for September from the National Institute of Statistics. Transactions are the heartbeat of markets, so it’s always worth a look at the monthly sales figure. What do the latest figures tell us about the state of the Spanish property market?
Mainly that there has been no major turnaround in the health of the market, but no lurch downwards either. Homes sale in September, not including social housing, stood at 33,276, up 7.4% on the previous month, but down 19% on the same month last year. Compared to 2 years ago, sales in September were down 42%, which just shows how much the market has shrunk since the boom.
The figures show that, though the market is significantly smaller than it was, it is not getting any smaller. It appears to be bumping along a floor of around 30,000 sales per month. Monthly sales have improved on an annualised basis, though they took a bit of a dip in September.
Conclusions
- The market is still depressed in volume terms, but not getting worse.
- Given the depressed state of sales, the glut of homes on the market is getting bigger.
- New build sales are holding up the market but may soon start to decline.
- Given all the above, you would expect prices to have fallen further.
Story from Mark Stucklin
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