Spanish resale property market boomed in May

From transactions to demand to pricing, Spain’s property market is showing signs of rude health.

Figures from Spain’s property registry offices for May have revealed an encouraging increase in sales activity, with almost 30,000 transactions made nationwide that month.

Based on last year’s data for the same month, this represents a healthy six per cent increase, with resale properties dominating the figures – second-hand homes accounted for 78 per cent of all properties bought and sold in Spain in May…

Interestingly, Spain’s new-build market actually contracted by about 40 per cent in May compared to last year, registering just over 6,000 sales.

Cumulatively so far this year, Spain’s property market has enjoyed an 8.5 per cent increase in transaction activity compared to the same period last year, and if the last 12 months are taken as a whole, the 329,000 property sales registered represents a 9.6 per cent increase on a year prior.

In Andalucía, home to the Costa del Sol, May saw 6,162 properties sold, which works out as a 9.1 per cent increase on last year and is proof again that the region’s property market is one of the healthiest and most stable throughout Spain.

A recent economic forecast by Ceprede suggests that – despite Spain’s falling population – demand for housing units is going to increase by as much as 85,000 per year over the next few years.

Currently there are around 18.3 million households in Spain, but that figure is set to rise to 18.5 million by 2016 as more and more Spaniards and non-Spaniards living in Spain opt to live alone or snap up a second property.

This data is further good news for a property industry that has showed throughout this year that it is set to thrive once more as foreign money and confidence pours in and sustained domestic demand begins to return after a long hiatus.

As for pricing, data from the Ministry of Development appears to show decisively that Spanish property prices are set to rise. The amount of money that changed hands in property transactions during the first quarter of the year was 0.8 per cent higher than the same period last year (reaching €10,540.6 million).

A 4.6 per cent increase in sales during that same period means that property prices are actually slightly lower at the moment than they were last year, but this is the first narrowing of the gap recorded for more than seven years, which suggests that price falls, at least, have slowed.

This data, however, is averaged out nationally, and it is well-known that some regions are still suffering from the effects of the recent property turmoil, and thus are dragging the average down. For the most mature markets – such as the Costa del Sol – prices have been rising steadily for at least 12 months.