Is the Costa del Sol property market still falling? Interestingly, figures from Real Estate Registration Statistics show a light at the end of the tunnel, at last!
With everyone having their own opinion on the goings on of the Spanish property market it is difficult to distinguish fact from hearsay. It all depends on whom you are speaking to.
Despite fears that sales would plunge after a hike in VAT on new home sales at the start of July, the Spanish property market had its best month in almost 2 years.
We all know that it hasn’t been a walk in the park, and that it seemed that the Costa del Sol’s bubble had burst with far more properties than purchasers.
However good news does lie ahead, comparing the sales in the last quarter of 2009 to the first quarter of 2010, we can see that re-sales have increased by 16.95% and off-plan sales have increased by 15.66%. This number of property sales is the highest it has been in the last year and a half. However these figures are not reflective of annual percentages as the property market in Spain is seasonal. If we take into consideration the seasonal fluctuations and average it out across the year we can see that the rate of increase of housing purchases amounts to 1.83% in the first quarter of 2010. This may seem like a small increase but this is the first positive growth after 15 quarters of decline.
A direct comparison between the 1st quarters of 2009 and 2010 shows a more favourable annual growth rate of 7.04% - resale properties are the main contributor to this growth rate with an increase of 21.90% of sales, whereas the sale of off-plan properties presents a decline of -3,97%.
Whether this recovery of the real estate market is structural or circumstantial can only be determined once the results of at least one more quarter is published, as both circumstantial factors (e.g. the expected increase in VAT rate) and structural factors (e.g. progressive price reductions) can be identified. The results of coming quarters will allow us to make this determination.
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