MADRID – The current economic recovery in Spain is clearly reflected in the housing market. Month after month, records are being broken when it comes to the number of real estate transactions. That is now as many as during the real estate boom at the beginning of this century.
In July this year, 50,258 homes across Spain were given new owners. That is not only about 2000 more than in the previous month but also crossing the limit of 50,000 real estate transactions that had not happened since 2008. This is apparent from data published by INE statistics agency on Wednesday.
Different situation than in 2008
However, the current economic situation is completely different from that in 2008. Then, after a period of economic growth for years, Spain was heading for the bursting of the real estate bubble. Now the country is emerging from a crisis that is also caused by an external factor. Due to the current economic recovery, the demand for housing has increased again after months of stagnation. Compared to the same month of last year, 53.5% more homes were sold last July. Looking at the period from January to July, this increase in the number of homes sold is 34.5%.
It is more relevant to compare the transactions in the housing market in July this year with those in July 2019, when there was no pandemic yet. Compared to that year, this number grew by 4%, indicating that there is still a large margin for further recovery.
Increase in sales of existing homes
According to data from INE, home sales in the private market rose by 58% (growth from July 2020) the most. In the protected (government subsidised) housing market, the increase was 15.5%. The growth rate for the sale of existing homes was 56.9% and for new-build homes 40.2%. In absolute numbers, a record number of existing homes were sold in July (40,748). The number of new-build homes sold (9,510) in July was slightly lower than the record figures recorded some time ago for this type of home.
The trend described above is a sign that the real estate market is returning to normal, as traditionally most real estate transactions take place for existing homes on the private market.
Fewer houses sold in the Basque Country
Looking at regional differences, only in the Basque Country has a decrease in the number of real estate transactions compared to 2020 been registered (-6.5%). The number of transactions in the housing market increased in all other regions, but this increase was not equally strong everywhere. Compared to last year, the number of homes sold in July rose by 13.3% in the region of Extremadura and in Cantabria by no less than 79.1%. In absolute numbers, most homes were sold in the Andalucia region, which was 10,598. This is followed by Catalonia (7,815), Madrid (7,289), and Valencia (7,226).