17/06/2014 – El Confidencial
Spanish property sector starts to show green shoots of recovery. After severe slumps in sales, prices and mortgage approvals, the market starts to breath again. According to data compiled by the General Council of Notaries, in April all these three important indicators improved.
Precisely, during the fourth month of the year, 30.048 transactions were carried out. This means a year-on-year increase of 11.1%, adjusted to 9.6% on the basis of seasonality data. The Notaries admit that even though the positive figures are strongly affected by poor performance just after the cancellation of tax deduction on property purchase at the end of 2012, the monthly numbers reflect stabilization.
By dwelling type, apartments showed a year-on-year rise of 7.9%. Non-subsidized units went up 7.8%, pushed up by used housing sales (+10.9%). New construction homes suffered a drop of 8.4% YOY. Single-family houses jumped up by 26.1%.
Modest Price Rebounds
When it comes to prices, the average price per square meter of houses bought in April post €1.216, therefore reflecting a slight YOY rise of 0.7%. In case of flats, values grew by 2.1% to 1.327 €/m2. Out of these, used properties saw a 3.7%, YOY rise, whereas new dwellings declined by 5.2% YOY to 1.404 €/m2.
Finally, average price of single-family homes marked 1.027 Euros per square meter, falling by 0.7% year-on-year. Free single-family units were sold at average 1.031 €/m2 with a 0.9% YOY decrease.
The turn in the sector is also proven by a significant recovery in sales in the first quarter of the year (a 45.4% upsurge), as well as a small appreciation in values (+1.6% YOY).
Mortgage Approval Returns
In the heat of increased number of transactions, lending had to come back. Loans granted for a property purchase hit in April 21.5% in year-on-year terms (12.039 credits), thanks to rise in mortgage approval for a house acquisition (+24.8% YOY), whilst for the rest of the properties they shrank by 7.2%.
If it comes to the average amount lent, it reached €112.327 (‑3.3% YOY). In case of dwellings, the mean post €107.486 (‑4.4% YOY), whereas for the rest of properties it was of €166.956 (+9.2% YOY).
In turn, the mortgages intended for construction dropped in April by 3.8% to 286 new loans. Average amount marked €218.387, thus seeing a YOY correction of 36.2% due to considerable reduction in mortgages granted for a house construction (-51.8%).
Loans for home purchases represented 36.9% of all mortgages, performing better than over the past months. Moreover, on average the acquisition was financed in 74.6% over the final cost.
Original article: El Confidencial (by Elena Sanz)
Translation: AURA REE