Spanish housing market springs out of the doldrums

Good news for expats

By Jim Atkins/ iExpats

Home buyers are piling back into the Spanish housing market with sales soaring so far this year. Almost 33,500 homes changed hands to the end of June 2016 – up a fifth on the same month last year and the fifth month in a row sales have risen by more than 10% in most regions.

The best results were in the Balearic Islands, where home sales increased by close to 40%, which is almost double the performance of most other regions. The only regions not to record double digit growth were Almeria on the Costa Calida (7%) and Malaga on the Costa Del Sol (9%). The national average increase was 17%. Many of the regions showing the highest home sales growth are the most popular destinations for the estimated 310,000 British expats living or working in Spain.

Seven regions posted gains of more than 20% – Murcia (24%); Barcelona (23%); Granada and Asturias (22%); Madrid and Huelva (21%) and Cantabria (20%). However the sales volume is far below that of the Spanish property market peak in 2007. By June 2007, 400,000 homes had changed hands. In the half year to June 2016, 185,000 homes were sold, up 27,000 on the same period last year.

The last time home sales reached this level was in June 2009. The news is good for expats who have suffered years of falling prices and have been unable to sell their homes due to negative equity and problems with buyers obtaining mortgages.

Property recession left behind

These problems look set to ease as Spain looks to have come through a property price recession. How long the recovery will take to reach former peak levels is the question many are asking.

In the US, house prices have followed a similar peak and trough to Spain and property values in many states are still up to a third below their highest level. There, house price monitor CoreLogic does not expect average prices to break through the previous high until May 2017 – which means the slump and recovery lasted will have lasted 11 years. The housing figures come from the official National Institute of Statistics in Spain.