The August data on transfer of property rights from the INE
in Spain was released today.
What does the INE report
include
The data issued by the INE is an overview taken from land
registry in Spain, of the total amount of properties in Spain transferred during
the month of August and includes data relating this to the previous year and
the previous month. The information whilst showing August could relate to actual
sales in the last couple of months because of the time lag between Notary and registration
of the property transfer.
The information in
the monthly report contains the total transfer of property rights not just the buying of residential property in Spain.
The data within the report covers all areas of transfers including, Bank foreclosures,
so where a mortgagee has defaulted on their Spanish Mortgage. The data also
includes the transfer of commercial property as well as inherited property and
land purchases. One of largest groupings making up one third of the total
includes bank repossessions where the Bank has concluded the litigation, the Subasta
date has passed without a buyer being found, and the Bank has purchased the property
from the courts.
Purchases of homes in
Spain
House sales, so those properties actually bought for residential
or holiday use, saw large drops in August in comparison to August of last year
and between July and August of this year.
Sales of residential property
in Spain fell in August 2013 by 15.4% when viewed against the same month of
2012. Possibly more concerning is that the data shows that house sales also fell
between July 2013 and August 2013 by 8.4% and showed the biggest drop between
these two months since the crisis began some 5 or 6 years ago.
New builds lagged heavily behind resale’s a trend that has
continued since the withdrawal of tax breaks on new builds at the end of December
2012. During 2012 the government in Spain, to help kick start the sale of new
build property, dropped IVA on the purchase of new builds from 7% to 4%. In
January 2013 not only was this reduction withdrawn but in fact a new IVA level
of 10% was implemented.
Because transfer of property data comes from the Land
registry and does not therefore necessarily reflect actual sales within the
month they happened, January and February 2013 appeared to show an improvement
in overall house sales. This data was in fact a reflection of the higher level
of sales made in December 2012 and November 2012 as people rushed to beat the
tax increase.
Is there any good
news
Not really. Year on year sales data seems to indicate that
sales are up from 2012. This however is not necessarily a true reflection of
what is happening. Firstly the figures include sales that actually happened at
the back end of 2012 and secondly one of the groups showing an increase by
11.4% is the group that includes Banks taking over properties they have repossessed.
Regional differences
One stark point coming from Augusts report is that the coastal
areas traditionally the first port of call for non residents buying in Spain
are holding up much better than the other areas of Spain where property is more
traditionally bought by the indigenous population.
