4 August 2016 – Expansión
House sales rose by 16.4% during the first half of 2016 compared with the same period in 2015, according to data published yesterday by Spain’s National Statistics Institute (INE). It is the largest increase registered during the first six months of the year since official records began (2004). A double digit increase was also recorded in 2010, but that amounted to 10.7%, well below the current figure.
Between January and June, 207,116 residential properties were sold, i.e. 29,000 more than a year earlier. In other words, an average of 1,138 homes were sold every day. If the current trend continues, house sales will surpass the 400,000 threshold for the first time since 2010. And 2010 was the last year when more than 1,000 homes per day were sold, on average.
The autonomous region that leads the ranking of house sales growth is the Balearic Islands, where sales grew by 38% during the first half of the year. It is followed by Murcia (+24.9%), País Vasco (+22.6%) and Castilla-La Mancha (+21.1%). All of Spain is now out of the red; in fact, all of the autonomous regions recorded double-digit increases apart from La Rioja (+6.7%).
Andalucía, Cataluña, Madrid and Comunidad Valenciana account for 64% of the market, in other words, for two out of every three homes sold. (…).
“The reasonable cruising speed for the sector is between 450,000 and 500,000 sales per year”, says José García Montalvo, Professor of Applied Economics at the University Pompeu Fabra. Although the “YoY increases are high, given that they are calculated on the basis of low base levels”, there is no doubt that the residential market is recovering, gradually, to reasonable figures, thanks to: the push from private investors who are buying homes to put them on the rental market; foreigners who are committing to Spanish real estate; and, finally, the slight improvement in traditional demand for housing, which during the worst years of the Crisis was pent up and moved to the rental sector, as people were unable to access mortgage loans and/or were limited by job insecurity.
“The rise of the rental market is generating demand for housing, because more investors are purchasing properties to put them up for rent”. Therefore, “we are never going to see a return to traditional levels of home ownership (85%). Rental properties will end up accounting for 25%-30% of the total market, a reasonable proportion that is comparable to the levels seen in other countries in our environment”, adds García Montalvo.
During the month of June, 36,856 homes were sold, up by 19.4% compared with a year earlier. (…).
Original story: Expansión (by Juanma Lamet)
Translation: Carmel Drake