By property expert Mark Stucklin
THE Spanish housing market returned to growth in the first quarter of the year (Q1) and delivered the second-best level of sales in more than 15 years, according to the latest data from the Spanish notaries’ association.
The numbers show there were 159,324 home sales witnessed by notaries in Q1, a fractional increase of 0.2% on the same period last year, but second only in sales volume to the post-pandemic boom year of 2022, when pent-up demand from lockdown pushed sales to the highest level since 2007.
The return to growth in Q1 comes after five consecutive quarters of annualised declines, with the whole of 2023 in negative territory in annualised terms.
But that was more a function of the extraordinary sales boom in 2022 than a reflection of weak demand in 2023. By the standards of almost any other year, 2023 was an excellent year for the Spanish property market, and 2024 has got off to a good start.
So it looks like buyers have stepped up since the pandemic and helped the market find a new equilibrium significantly higher than it was before Covid.
With Q1 sales 13% higher than the same period in 2019, the coronavirus turned out to be a tonic for the Spanish housing market.
We will have to wait a few months for notary numbers to see how much support came from foreign demand. Last year the number of foreign buyers was the second-highest on record but data from other sources suggest international demand is cooling down this year, though still 30% above the 10-year average.
Looking at the regions of most interest to foreign investors, sales increased by 6% in Murcia and by 1% in the Valencian Community, but declined by 1% in Catalonia and Madrid, 2.5% in Andalucia, 4.5% in the Balearics, and 11% in the Canaries – the only region where the downward trend accelerated.
Turning to house prices in Q1, the national average of sales according to the notaries was 1,698 €/sqm, an increase of 5% on the same period last year, and 35% up in a decade (in nominal terms). Prices increased more than 12% in Murcia and the Balearics, but declined by 3% in Catalunya.
Compared to other European housing markets for which data is available from Eurostat (the EU’s statistics office) Spain has been outperforming the neighbourhood in recent quarters, though data for Q1 is not yet available. Spain had the highest level of quarterly sales growth in Q4 of last year (+15%), compared to a 14% decline in France.
The overall picture presented by the notary figures is one of strong but steady home sales and prices that should reassure investors, especially when compared to the less favourable numbers coming from other European markets. However, you never know what shock might be around the next corner.
Mark Stücklin runs Spanish Property Insight and writes reports on the housing market in Spain.
