Spanish property investment falls in January

on Mar 20, 2015

Recent signs that the Spanish property market was finally returning to a stable and more sustainable rate of growth after a prolonged period of recovery have been dampened somewhat by the release of the latest figures from the Spanish Council of Notaries which show that the number of sales for January were 10.9 percent lower than the same month in 2014.

This is the first major fall in sales figures since the end of 2013. However, despite the drop off, analysts have moved to caution against unqualified pessimism regarding the potential for future growth in the residential property market. The primary mitigating factor in playing down the drop in sales is that within the context of annual figures, January often sees a dip in the level of market activity.
It was also reported that the price paid per square metre of residential property fell six percent to €1,234 in January, compared with the same month a year earlier. Despite the fall in the square meter price, new apartments remained 20 percent more expensive than similar second-hand properties.
Furthermore, the figures also show that there was a 31.8 percent drop off in the number of new build apartments sold in January, whereas second hand residential sales were up 7.6 percent. Significantly, the number of detached and semi-detached houses that were sold in January rose 8.4 percent, indicating that while overall activity may be down, it is perhaps partially due to a lack of supply of high quality new housing as opposed to lack of demand.
In contrast to the lower sales figures, the level of lending in January actually increased year on year. In January, 9657 mortgages were approved, a rise of 11.4 percent on last year, with the average amount of mortgage capital rising eight percent to €130,292.

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