9 August 2017
In the first six months of the year, 235,672 houses were bought and sold, a 13.2% increase year-on-year, according to the INE. If the trend continues, 2017 will become the best year since the end of the bubble.
The housing market is halfway through its best year since 2008. The recovery of residential activity is in full swing, prices are rising moderately and sales are brisk. In the first half of the year, 235,672 houses were bought and sold, up 13.2% year-on-year, the best figure in the last nine years, when the housing bubble and the international financial crisis were about to explode. The amount is 46% more than in 2014.
If the trend continues, the year 2017 will end with more than 470,000 transactions, 50% more than in 2013, when the market hit bottom. “Everything indicates that 2017 is going to be a very good year in terms of volume of purchases, still very far from the years before the crisis, but with a very healthy and professionalized sector and increasing demand for purchases,” the director of Estudios de Pisos.com, Manuel Gandarias, said.
In June, 44,135 transactions were recorded, 19.3% more than in the same month of 2016, according to statistics from the National Institute of Statistics. The market’s performance in June was the best since 2008. “This is undoubtedly good news for the sector,” says Fernando Encinar, head of studies at Idealista. “However, there was a decline after the considerable rise in May (44,782 sales), which is similar to sales in July.”
In fact, month on month sales fell by 1.4%. But the trend in the residential sector is what’s important, and it would be misleading – and uncertain – to believe that the trend is bearish. On the contrary, the last two months of the INE series have been the best since the boom years, except for January and February 2011, which were inflated by the statistical effect of the end of the tax relief for the purchase of first homes.
Transactions fell 8.6% in April, ending 14 consecutive months of year-on-year increases. The May and June rallies indicate that the bull market that began in 2014 has not yet ended.
In June 2017 36,236 transactions of second-use homes (8 out of 10) and 7,899 new ones (19.8% year-on-year) were completed. “New housing sales continue to increase and now account for one of every five houses sold. We are already beginning to see the result of the sales of new housing, which were flat in previous years, and we will see how it will continue to grow, ” Gandarias explained.
The rebound in new construction “shows some recovery in the sector in very specific areas where demand is very high and the product is scarce,” adds Encinar.
All the autonomous regions saw increases in the sale of homes in June, except Aragon (-1.2%). The highest increases occurred in Navarra (+40.2%), La Rioja (+40.1%), the Community of Madrid (+32.6%) and Murcia (+32.2%).
These huge increases are due to “the positive signs in the economy, employment, consolidation of financing and greater confidence in the sector both by foreigners and nationals,” according to Beatriz Toribio, head of research at Fotocasa. Of course, “we can’t forget that we are still light years from the residential activity seen 10 years ago” and that the “recovery will be slow, moderate and distributed by area.”
In absolute terms, the leader by far is Andalusia (8,551 sales agreements, in June), followed by Madrid (7,298) and Catalonia (7,039). Between the three they accounted for no less than 52% of the residential market. If the Valencian Community (6,229) were to be added, they would account for 66% of transactions. That’s two-thirds. The fifth is the Canary Islands, following far behind (2,512 transactions).
However, the fact that “Canary and Balearic archipelagos and the Comunidad Valenciana lead the growth in the percentage of operations per 100,000 inhabitants permits us to see the weight of the second residences in the statistics”, Encinar points out.
Original Story: Expansión ProOrbyt / Juanma Lamet
Translation: Richard Turner