Sunday, July 1, 2012

Spanish housing market shows signs of finding a floor

The Spanish property market shrank by just 3pc in July compared to the same time last year, and shows signs of finding a floor, in transaction terms at least.
There were 24,005 home sales in July (excluding social housing), 3pc less than the same month last year, and 8pc more than the previous month, according to the latest figures from the INE.
July’s annualised fall was the smallest of the year by a wide margin, and it now looks as if the market has found a floor in transaction terms, as illustrated by the chart above. We will have to wait a few more months to see if the trend is confirmed.
There were roughly 275,000 homes sold over 12 months to the end of July, which might turn out to be the minimum number and turning point in this cycle. In a country of more than 47 million people, and some 16 million households, not to mention European demand for holiday-homes, there comes a point when the housing market will have to start growing again.
The following table provides all the key data on Spanish home sales over the last 5 years (click to enlarge).
The Department of Housing also recently published housing market transaction data for Q2, broken down by region in the following table.

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