Words: Ashley Rigg
Published: 16th September 2010
*Surprise surge in Spanish new home sales
Sales of new homes in Spain jumped 21% in the last year and now account for a higher proportion of sales than resale property, according to figures from the National Insititute of Statistics.
Overall, property sales rose 15% year-on-year to 38,838 in July, which on the face of it would indicate the Spanish real estate market may have turned the corner.
Unusual market
In “normal” markets, you would expect resale property to account to far larger proportion of sales than new build. However, a combination of a supply overhang and a desperate banking system, have produced an unusual and potentially explosive situation.
By offering consumers attractive financing terms (sometimes 100%) on new properties they are keen to get off their books, while turning down loan applications for properties they don’t own, the banks are not only skewing the figures, they are putting agents out of business.
The yearly figures from the National Insititute of Statistics suggest the market is recovering but the TINSA data for August yesterday suggests the opposite.
The big worry is the banks. By controlling supply, they hold all the cards and any sudden release of stock could trigger a sharp correction.
Hold onto your hats!
Source: Global edge
User Comments
Interesting article, especially as we live, work and breathe in the Spanish property market, definitely seeing the truth of this on the ground and long may it continue
Oisin,
Calahonda Rentals