15/07/2014 – Cinco Dias
What was first? The increase in housing sales or the slowdown in pricing drop-off? The answer is not clear as both factors influence each other. What we know for sure is that among all the 52 provinces (including Ceuta and Melilla), in 33 of them the number of real estate transactions went up in May on the year-on-year basis. Additionally, in four of them the prices brushed off and started to rebound.
Since October last year, the newspapers have been announcing a rise in purchases due to the confidence and job market improvement. Prices returned to the 2004 levels.
Now, a new analysis allows us to see how the situation developed in each province, basing on the averaged May data published by the Ministry of Public Works and the National Institute of Statistics.
The detailed information reveals relation between the highest demand/price and the value-stagnation (below the national -3.8% average) areas.
In fact, seven months ago, the Mediterranean Coast and the two archipelagos saw the first jumps in sales as the properties depreciated by almost a half during the recession. Surprisingly, now the Balearic Islands, Las Palmas de Gran Canaria, Alicante and Ceuta lead in the “most robust increase in transactions in May” ranking, compared to the same month a year before.
In the Balearic Islands, house purchase shot up by 33.10% YOY in May. The region usually watches the homes becoming more expensive at an annual pace of 2.4%. In Las Palmas, operations jumped by 18.48%, while prices increased by 1.8%. In Alicante, the rise in sales was not so impressive and marked 1.57%, while values advanced by meagre 0.1% YOY.
The most noteworthy is that the tendency seems to have just begun. “Places where houses had cheapened significantly were flooded with the demand and, consequently, the prices started to go up again”, explains the leading property portal.
Another not-to-miss factor is the foreign contribution to the statistics. In Catalonia, transactions tapered out in Gerona and Barcelona, where non-residents bought most. In turn, Tarragona and Lérida still lag behind. What could happen in a short-term? Logically, more sold properties drive new construction (in Mallorca the building permits have already raised by 10%).
Because of the overhelming amount of stock, the Spanish capital cannot balance rise in some areas with poor demand and discounts in other. This region registers a 5.5% fall in housing sales, while its prices climb by 0.6% year-on-year.
Original article: Cinco Días (by Raquel Díaz Guijarro)
Translation: AURA REE