Hopes have emerged that the battered Spanish property market could be hitting something that feels like a floor. Pardon the vague language, but with 1 million homes still on the market to say the future is torrid for Spanish property is an understatement despite the latest positive data.
The most positive aspect of the latest data to be released shows that home sales transactions rose 5.3% between October and November last year, leaving them down just 2.6% year on year, compared to 21% in October and 17% in September.
On top of that Spanish house prices were down just 6.2% on the year ending the 4th quarter, compared to a fall of 7.8% in the third quarter, and 8.2% in the second quarter. However, this is according to the governmental housing ministry index, which is based on the valuations of surveyors. It says house prices have fallen 9.5% since the peak in the first quarter of 2008, whereas other industry bodies say prices have fallen 20%-30% in the past 2 years.
This is all very positive, especially the monthly increase in sales, which is badly needed if Spain is to start clearing the 100s of thousands of empty apartments and villas left from the construction boom. A boom that saw Spain building more properties than, France the UK and Germany put together at its height.
The devastation of the housing market from a catastrophic drop in demand has led to the devastation of the Spanish economy, because of the complete freeze in the building industry. Thousands of jobs have been lost and the economy continued contracting in the third quarter, 2 quarters after its main rivals Italy and Germany returned to positive growth.
On the brighter side, we are once again coming into the hot season for overseas property demand, and Spain is still very much a favourite with British and Irish buyers. According to the top 10 for 2009 recently released by the Property Abroad.com portal, Spain was the most popular country with those browsing and searching for property on the site.
The portal said that Spain, always a favourite with its user base had been knocked into second place since May, when America overtook it. None the less, its holding second place since saw it bring sufficient traffic and search volumes to make Spain most popular for 2009 as a whole.
February is traditionally a very good month for overseas property sales, and this continues throughout the till November. Given that demand for overseas property began increasing in the second quarter of 2009, 2010 could see sales increasing massively in Spain’s less overdeveloped areas.
Photo credits: Sanderovski via Flickr