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House Sales Increase By 14% YoY But Prices Fall By 1.5%

20 January 2015 – El Economista

31,576 homes were sold in November 2014, an inter-annual increase of 14%; this figure rises to 18.5% per the seasonally adjusted series, according to the Notarial Statistics published this morning by the General Council of Notaries.

The figures reflect a clear stabilisation in monthly sales. Between January and November 2014, the average number of transactions amounted to 29,016 per month, i.e. 17.5% higher than during the same period in the previous year (24,697).

By type of property, flat sales recorded year-on-year growth of 14.4% (19.1% per the seasonally adjusted series), similar to the increase in free market flats (13.9%). This increase in the number of flat sales was due to a strong rise in the sale of existing flats (21.5%), whilst the purchase of new flats declined by 21.0% year-on-year. Meanwhile, sales of family homes increased by 12.3% year-on-year.

In terms of average prices, the cost per m2 of homes purchased in November was €1,194, reflecting a YoY decrease of 1.5%. This reduction in the m2 cost of homes was driven by a decrease in the price per m2 of flats (-3.1% YoY). The price per m2 of family homes increased by 4.1% YoY.

Within the realm of flats, the price per m2 of existing flats amounted to €1,287 (down 1.3% YoY) and the price per m2 of new flats was €1,506 (down 6.4% YoY).

Finally, 7,568 other property-related transactions were closed in November (up 3.8% YoY); 38.0% of which related to land and plots. The average price per m2 of these transactions amounted to €258 (down 12.0% YoY).

Thus, the sector’s monthly figures continue to show that the Spanish property market is stabilising.

Mortgages

The evolution of the mortgage market for the purchase of homes also reflects the stabilisation observed in the real estate sector, having recorded, for the sixth consecutive month, an increase in overall credit, in both absolute and seasonally adjusted terms.

The number of new mortgages taken out during the month of November amounted to 23,264, which represents a strong year-on-year increase of 10.3% (14.7% per the seasonally adjusted series). The average amount borrowed in this case was €126,525, reflecting a minimal increase of 0.1% year-on-year.

Meanwhile, the number of mortgage loans taken out to acquire a property rose by 35.1% year-on-year in November (to 13,857 loans), due mainly to the increase in lending to purchase a home (la concesión de créditos para la adquisición de una vivienda) (37.3% YoY), whilst an increase of 12.5% was recorded for other properties. The average amount borrowed for acquisition amounted to €113,093 (down 0.6% YoY). For homes, average equity was €109,022 (down 0.4% YoY) and the average loan for other properties amounted to €159,533 (up 0.7% YoY).

In turn, the number of mortgages taken out to finance construction rose by 46.8% in the year to November, to 345 new loans. The average amount borrowed amounted to €255,841, representing a year-on-year decrease of 25.7%, driven by a significant decline in the average capital of loans used to construct non-residential buildings (down 50.7%).

Similarly, the number of mortgages taken out to finance business activities increased by 0.7% year-on-year, whilst the amount borrowed decreased by 21.0%.

Finally, the percentage of homes purchased using mortgage financing amounted to 40.6%. In addition, for this type of purchase with financing, the amount borrowed represented an average of 74.9%.

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Original story: El Economista

Translation: Carmel Drake