The number of real estate transactions grew for the first time in 13 months in Spain last quarter, but with volume still off 60% from the market’s peak, claiming recovery would be premature. An excess of supply, tight credit and hard economic times have hurt the holiday home sector, which has also been hit by the loss of British business due to the weakened Sterling. See the following article from Property Wire for more on this.
Property sales in Spain have plummeted from over a million in 2006 to 400,000 at the end of the third quarter of this year, according to the latest published figures.
Spain’s real estate register shows that there were just 110,709 transactions in the third quarter of 2009, down 15% compared to same period last year, with coastal properties suffering the most.
But the figures also show that the decline could be starting to level out as the number of transactions in the third quarter was slightly above those of the second quarter which were 100,850.
It marks the first time that sales have risen on a quarterly basis for 13 quarters.
But it is too early to say that the sales crash is coming to an end.
‘In terms of transactions the market has shrunk by around 60% but the number of homes on the market has just kept growing, meaning there is a growing number of vendors chasing a dwindling number of buyers,’ said Spanish property expert Mark Stucklin.
‘We will need at least a couple more quarters of data to confirm if there is a trend towards increasing home sales.
Common sense suggests that means more power to the buyers, who will be pushing for lower prices,’ he added.
The figures also show a larger than average fall in the sale of holiday homes.
Sales over 12 months were down 43% in the Costa Dorada, 37% in the Costa de la Luz, 36% in the Costa Blanca, 36% in the Balearics, 35% in Tenerife, 32% in the Costa Brava, and 31% in Barcelona.
‘Formerly middle class holiday homes have been become luxury items, out of reach for most households,’ said Alfredo Martínez, provincial boss of the Association of Bank Users’ consumer group.
Sales of holiday homes are down 80% according to Cayetano Rengel, head of Malaga’s estate agents’ association.
‘The problem is the supply of property has grown so much that competition is brutal, on top of which the banks have turned off credit,’ he explained.
One of the big problems is the exodus of British vendors and buyers, who have been driven out by the fall in the Sterling.
‘They have lost 40% of their purchasing power and now living in Spain does not make sense for many of them,’ said José Prado, president of the Association of Constructors and Promoters (ACP).
This article has been republished from Property Wire. You can also view this article at Property Wire, an international real estate news site.