Thursday, 13 February 2014

Sales of property in Spain for December 2013

The monthly data from the National Statistic office was released yesterday for the transfer of property rights in Spain.

Data showed a small decline in sales from December 2012 to December 2013
This decrease was not unexpected and was in fact much smaller than was anticipated. 

The decline was due in a large part to the abnormally high amount of completions in December 2012 in comparison to the rest of 2012 as buyers brought forward buying in Spain to beat the ending of tax incentives which were removed in January 2013.

Were there positives to be taken from the Data

Yes. Firstly the overall transfer of property rights fell by only 0.50% in the month whilst residential sales were down 3.6%. This means the sale of commercial property held up quite well in the month indicating the underlying economy may be recovering.

The second and possibly most valid point was that for the first time in 5 years the variation between sales in November to December, whilst traditionally always lower at absolute levels, showed a positive trend meaning the overall decline in sales stabilized in the month.

What challenges remain

Whilst there has been much more positive news in the last few weeks with, small increases in sale prices being announced, Spanish mortgages more readily available again and generally higher levels of activity and a mood of optimism creeping in, it will be a long haul back to normal market conditions.

The challenges that remain in place are the level of bank repossessions, which was the only area of increases in 2013, the overall economic recovery and the continuing uncertainty many feel when looking at Spanish property as an investment due to past perceived issues on legal protection when buying in Spain.

It would appear however that we may now be at, or very near to the bottom of the cycle and that 2014 will see slow but sustained growth in the sale of Spanish properties. 


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