Home purchase in Spain has triggered and prices recorded their biggest rise since 2007. This April, 35,199 homes changed hands, 29% more than a year earlier and the highest since February 2013.
The real estate sector recovers in Spain.
More houses with higher prices have been sold this year this year In Spain. Housing prices did not record such a rise since 2007 breaking the barrier of 35,000 homes, something that has not happened since 2013, after scoring an increase of 29%.
After eight long years of restructuring, the housing market continues to grow, although it is still far from the record levels reached in the best years of the boom.
Although the bubble levels are still a thing of the past: in the first quarter of 2007 the rise in prices was double of the current (13.1%) and average mortgages were much higher. In addition, in those good days, only in May of that year they exceeded 75,000 units. Although now the market movement is less frenetic, what is clear is that after these lean years there is a recovering pace and prices, especially in communities such as Madrid and Catalonia.
In the first quarter of 2016 it is when prices have accelerated its growth to 6.3%, well ahead of the 4.2% in the fourth quarter of 2015, according to figures from the National Statistics Institute.
Eight consecutive quarters with price increases.
There are now eight consecutive quarters since 2014 that house prices returned to positive rates, with an annual increase of 1.8%. The demand pull is being reflected in prices.
For potential buyers who are still wondering if it's time to buy, the answer is a pretty categorical “yes”. However, you should analyse specific locations to see price history before you commit to an acquisition.
The type of housing that has risen in price was mainly second hand, which has risen almost two and a half points to 6.4%. The annual rate of new housing prices is 6.1%, three tenths points higher than the previous quarter.
Higher price is not a deterrent for purchasers.
Although houses are more expensive each month is not preventing the actual purchase. In fact, sales rose 29% in April compared to the same month of 2015, adding up to 35,199 operations, its highest since February 2013 (35,535 units), according to the INE. This indicator chained three consecutive months of annual gains after rising 15.8% in February and 16.8% in March.
Taking into account the first quarter of 2016, in Spain 103,288 homes were sold, according to statistics on real estate transactions and these figure come from the Ministry of Public Works and Housing obtained directly from notary transactions.
To find a first quarter with more operations we must go back to 2010 (with a total of 107,079). The figure represents a rise of 20.7% from the first quarter of 2015.
Housing reawakens interest thanks to the reopening of credit, price stabilization, the high returns offered by the rent versus low interest rates and the slight improvement in the economy. But experts believe it is early to talk about recovery. 29% growth in the number of operations confirms the good health of the housing market, which seems to be returning to a normal condition.
The INE considers two years unsold new homes as second hand.
Although the activity is focused on second-hand housing we must know that The INE considers two years unsold new homes old as second hand homes.
The upturn in new construction has also turned to double digits. The second hand transactions increased by 32.3% year on year, to a total of 28,028 operations, while sales of new homes rose by 17.6% year on year, to 7,171 purchases.
After eight years when no houses were sold or bought, the real estate market moves with more panache. But it does so at two speeds. The crisis has left a two-speed property market in Spain with price behaviour and purchases very uneven. The data show clearly that the worst is over in Madrid, Catalonia, the Balearic Islands and much of the Mediterranean coast, but in the rest of the country the picture is not so encouraging.
When it comes to buying and selling in April, the highest number of house sold per 100,000 populations occurred in Valencia (138), Balearic Islands (129) and Madrid (103).
Andalusia was the region where more houses operations were carried out in the fourth month of the year, with 6,715 sales and purchases, followed by Catalonia (5,465), Valencia (5,423) and Madrid (5,204), according to the INE.
Light years from these regions are other Spanish regions where activity does not even reach five hundred purchases. Communities that made fewer house sales were La Rioja (250), Cantabria (371) and Navarre (467).
It is also an uneven behaviour in prices. All communities increase their annual rate in the first quarter of 2016, except Castilla La Mancha and Extremadura, with declines of six and nine tenths respectively. The largest increases were in Madrid (9.7%) and the Balearic Islands (8.8%), while the more moderate were those of Castilla-La Mancha (1.5%), Castilla y Leon and Extremadura (both with up 1.7%).