Spanish property market in 2008

I have just reviewing a range of official statistics (Registro de Propiedades, INE, etc..) have compiled a brief analysis on how the Spanish property market fared in 2008. As can be imagined sales are down (surprised?), but not all appears to be doom and gloom.

First let us have a look at planning approvals. According to the statistics, planning approval is 58.1% with only 252,916 approvals in 2008. Still a high figure by most standards, but believe it or not, this is Spain’s biggest fall on record, not surprising considering the last property boom was the largest in Spanish history, with the largest building boom, etc…
On a positive note for those involved or reliant on the residential building sector, VPOs (subsidised housing) rose by 3.6%.

Now let us review property sales. According to the information I’ve managed to find, the Spanish property market shrank 29% in 2008. What that means in is that there were 561,500 property sales in 2008 compared to 788,500 properties in 2007.

Of the 561,000 property sales, 296,500 were for newly built properties (a 13% drop) while 265,000 were for resales (41% drop).

Over the last quarter of 2008 there were a total of 113,300 sales, with new builds at 64,500 and resales at 48,800.

Now although the figures are not good, how can a shrinking market be good? What I do see as a good sign, is that even with the financial crisis last year and all the turmoil surrounding it, properties were still being bought and sold.

What is interesting from the statistics is that looking figures for 2008, newly properties made up over 50% of all the sales. Believe it or not this is not surprising. Many of these sales would have been on properties that had been purchase in 2007/6/5 that are now only going to completion. This year we should start to see newly built properties make up a lower percentage of the total.

So obviously properties have been sold in Spain in the last year, but as you can imagine at reduced prices. Although of course unique properties or those that cannot be easily reproduced (location, quality, etc…) are holding their prices a lot better than many of the mass built properties found in some areas.

Andrew Belles

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