Spanish property selling at fastest rate for five years

There were more than 400,000 homes sold in Spain in 2015 – the most in a single year since 2010 and a growth of 9.8% on the previous 12 months.

Data from the Ministry of Development published last week shows that there were 401,281 transactions, of which more than 114,000 were recorded in the fourth and final quarter. This strong end-of-year performance suggests that a strong tail-wind will blow into 2016, meaning this year is likely to see even more home sales recorded…

Although the 400,000 figure is a long way below the market’s 2006 peak – when an unprecedented and unsustainable one million homes changed hands – the growth feels strong and steady, and is set to deliver sustainable levels of return and buoyancy to a market that has experienced a series of lows since the global economic crisis.

The current political uncertainty hanging over Spain notwithstanding, the signs are good that 2016 will be marked by even more growth and a distinct shifting in the nature of the property market: in 2006, 50% of all homes sold were second-hand properties. In the final quarter of 2015, that figure was 87.9%, which suggests that the market is mobilising for the right reasons, rather than being pushed along on the back of a credit-fuelled construction boom.

Spanish new builds are still in a state of oversupply, even with the three-year period between 2007-2010 when barely any construction sites were active. This new reality hints at a property sector that has a smattering of unsold, and perhaps unsellable new properties, but a good balance between supply and demand in the resale sector.

This, perhaps more than any other metric, is the sign of a healthy property market, and one that is poised to post steady price increases and a sustained, growing level of interest.