Data from the Spanish property registrars for the second quarter of 2015 has shown an extremely impressive increase in both sales and prices as the property sector continues its recovery. These increases were complemented by a rise in foreign buyers which again demonstrated the importance of foreigners to the sector.
Prices are up by 5.1% year-on-year for Q2 after having registered a 2.65% year-on-year increase in Q1. The rise in prices recorded by the registrars from the first quarter to the second was 2.8% illustrating the strength of the increase which occurred from April to June.
The surge in prices set a post-boom record for a quarterly year-on-year increase which will fill owners of Spanish property, as well as Spanish property professionals, with optimism for the future. The peak-to-present decrease in prices has now dropped below 30% according to the Registrars and currently stands at 29%.
Sales continue their rebound
The number of property sales in Spain was up by 11.12% year-on-year and, although this was down on the first quarter of the year, this number of sales represented the second highest quarterly total recorded for the last nine quarters at 87,187 sales for the three months.
As has been the story for the last few quarters the increase in sales was driven by resales which were up 43.56% year-on-year while new-build sales showed a massive year-on-year decrease at 39.61%. This comes as no surprise due to the lack of development and quantity of supply in the sector.
The tourist regions performed well in the second quarter in terms of sales with the strongest sales growth being registered in Andalucia where the year-on-year increase was recorded at 13.9%. Sales also rose in all other principal tourist regions: the Balearic Islands (13%), Catalonia (10.4%), the Valencian Community (10.1%), Murcia (4%) and the Canary Islands (1.8%).
The regions of Andalucia, the Valencian Community and Murcia were three of only five regions which saw sales rise in comparison with the first quarter of the year. Murcia showed a 5.59% quarter-on-quarter increase while the figures were 2.47% for the Valencian Community and 1.9% for Andalucia.
Costa Blanca & Costa del Sol
The provinces representing the Costa Blanca (Alicante) and the Costa del Sol (Malaga) both fared well with prices rising by 1.6% and 0.8% respectively on the previous quarter. Of the other popular provinces with tourists the best performers were Tenerife: +10.18%, Murcia (Costa Cálida): +5.59% and Tarragona (Costa Dorada): +5.24%.
Foreign buyers made up 12.82% of all purchasers in Q2 according to the Spanish Land Registry. This equates to 11,177 of the 87,187 purchases that were made in the quarter representing an increase of 1.03% on the first quarter of 2015 (11,063).
The rise in purchases made by foreigners was primarily driven by an increase in the number of British buyers up 13.1% on Q1 and a massive 37.3% year-on-year to a total of 2,214 purchases. The British now make up 19.85% of all foreign purchasers therefore representing approximately one in five Spanish property purchases made by foreigners.
The strength of the British market is most probably due to the favourable exchange sterling-euro exchange rate at present as well as the continued improvements in the UK economy. The rise in British buyers made up for a lack of dynamism in other key markets with the second-placed French market down by 12% year-on-year and 19.5% on Q1.
The Russian market continued its freefall and was down 21.6% on Q1 and 47.2% year-on-year as the devaluation of the rouble continues to impact sales to Russians with the market having fallen from being the second largest foreign market to the seventh in a period of two and a half years.
Belgian buyers of Spanish property were in the news recently as Belgian papers highlighted the fact that nine Belgians bought in Spain every day in Q1. The Belgian market shrank in Q2 down by 12% on Q1 and 2.4% year-on-year to 724 buyers making up 6.49% of the foreign market for Spanish property.
The German, Swedish and Italian markets all held firm showing increases of 0.2%, 3.6% and 8.2% respectively on Q1 and 10.9%, 3.6% and 22.8% year-on-year. The German market has become increasingly important over recent quarters and ranks in third place behind just the UK and France.
The data allows for a lot of optimism on the state of the Spanish property sector with the fundamentals again showing serious improvement and prices beginning to react to the increase in demand and the improving economic situation in Spain as well as the reduction of total stock.
The foreign market continues to be key in this panorama and the sustained increases in numbers of foreign buyers provides greater stability for the sector as a whole as well as strengthening demand in Spain’s main tourist destinations which in turn stimulates new development in these areas.
Main image: Photo of the Los Lagos property development on the Costa Blanca, Valencian Community ©Patrimi Resorts S.L.