Q1 2008 Spanish Housing Ministry Figures Released

September 11th, 2008 at 12:06pm GMT

The Spanish Ministry of Housing recently revised their house price data for Q4 2007 and provided provisional data for Q1 2008. It makes you wonder what they’ve been doing for the past 5 months or so doesn’t it?

You can download sanitised versions of the MVIV data for:

• Average price paid
• Number of transactions
• Sales volume

Comparing numbers for Q4 2007 to Q4 2006 and Q1 2008 to Q1 2007, we get an idea of the scope and speed of the slowdown.

Resale Market Suffering

Comparing the number of property transactions completed in Q1 2007/8, both foreign and Spanish buyers seem to be favouring an off-plan purchase. Even though sales of newly built properties and resale properties have declined by 32% Y-O-Y overall, sales of new builds have reduced by 12% and resales by 47%.

That trend is further amplified when looking at transactions involving foreign buyers, where new build transactions have slipped 26% Y-O-Y, and resales by 46%.

It’s no surprise that developers and constructors have more margin to play with and more incentive to sell quickly to preserve cash-flow or service debts. Predictably, with sales volumes down overall, both Spanish and foreign buyers are eschewing the purchase of a resale property for the bargain-basement new builds.

Spanish Property Market Shrinking

With the number of transactions down by 32% overall, the amount of money changing hands in the market is also down significantly. However, the Ministry’s average sales prices are still unreliable as this comparison against Kyero’s data demonstrates.

Even though the MVIV data is still showing a 2% Y-O-Y increase in price for resale property in Andalucia, this clearly isn’t consistent with a property market experiencing a decline in volume of between 30% to 60%. The MVIV data hides the fact that less and less money is being handed over ‘under the table’ – therefore artificially increasing the recorded transaction value.

The Kyero data hides the fact that even though resales asking prices appear to have slipped 4% Y-O-Y, there is no reliable record of actual sales prices. Again, in a declining market, actual sales values are likely to be significantly lower than their advertised prices.

Bearing in mind these limitations, we still see a significant decrease in the overall sales volume of the Spanish property market.

In Q1 2008, foreign buyers accounted for 8% of the total number of property transactions, and 9% of the total transaction value. This indicates that foreign buyers tend to spend between 5% and 11% more than Spaniards on a property purchase in Spain.

Popular Towns in Spain

Looking at the number of property completions in Q1 2008, we see that some towns are faring better than others.

(All MVIV figures quoted exclude sales of subsidised housing)

It’s surprising to see Gijón in Asturias so high up in the sale of new build properties, alongside such traditional heavyweights such as Estepona and Malaga. Remember, however that these are new build completions where the initial sale will have taken place some years earlier.

Also surprising is the appearance of Marbella in the resales Top 10 and Murcia city as the outright winner in combined unit sales in Q1 of 2008. Even though the market has slowed, clearly a significant volume of property is still being bought and sold in Spain.

Martin Dell, Kyero.com