As talk of a recovery within the property market gathers momentum, Spain’s notaries release figures to reinforce what experts within the industry are getting excited about; property sales are up and the future of the real estate sector is looking bright.
In November 2014 a total of 31,576 residential properties were bought and sold in Spain, representing an average increase of 14% compared to the same period last year. The average price of a residential property fell by 1.5% to €1,194/sqm, shows latest notary statistics.
30,000 properties were sold every month last year (apart from August); an increase of 5,000 property sales per month compared to figures in 2013. This year-on-year increase in property sales show an emerging trend of stability filtering through the property sector.
Apartments are the most popular types of properties for sale on the Costa del Sol amongst buyers; 80% of properties that changed hand in November 2014 were apartments or flats.
One statistic which could raise some concern amongst industry experts is that of 25,048 properties sold in November 2014 only 2894 apartments were new build, ‘first hand’ properties, representing a year-on-year decrease of 11.6%. This figure creates somewhat of an inequity between new build and resale properties as second hand property sales rose by 21.5%.
The imbalance between old and new property sales could be down the fact that when the economical crisis hit, the building and construction industry took the full brunt of the crash. Workmen downed tools, companies shut up shop and building projects and developments were left incomplete whilst they rode out the storm. Now that the market has picked up, the full effect of the crisis is evident; there simply are not enough new build properties for sale.
Another contributing factor could be that the average price of new properties, according to the notaries report, is €1506/sqm – 17% more expensive than a second hand, resale property.
These figures show that even though the worse of the crisis may be over, buyers are still cautious as to how much they are willing (or are able) to invest in a property in Spain. Lending and funding by the banks is forecast to become more readily available and new residential developments are starting to appear along the coast.
Over the coming year, these two factors will work together to narrow the disparity between property prices and the types of properties being purchased in Spain.
It will come as a welcomed relief amongst sellers, developers and experts within the industry that confidence within the Spanish property market is finally returning.
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