July has given with one hand and taken with the other, as far as the property market is concerned.
According to the General College of Notaries, the number of property sales and the number of new mortgages increased, while the average price decreased.
In July, over 52,000 home purchases were recorded (52,014). This represents a 4% increase over the previous year, and mostly due to sales of second-hand property. Also in July, almost 25,000 new mortgages were approved for the purchase of housing, 11.1% more than in July 2017. In both cases, the figures are similar to the maximums of 2012.
As far as the sale of houses is concerned, the volume of operations in July is the fourth highest since the end of 2012, the point when tax relief for the acquisition of a house came to an end. June of this year marked the maximum since then, with more than 54,000 transactions. Incidentally, June 2017 also exceeded 54,000 sales. Following those two June’s is March of this year (2018), with more than 52,000 operations.
Mortgages have also manged to break records this year. In July, there were more new mortgages approved than any single month since December 2012.
But before everyone gets too excited, prices come along and ruin everything. Notaries confirm that the average price of a square metre of housing was 1,376 euros, in July, which represents a fall of 4.5% year-on-year. This is the largest single decrease in just over three years (there was no other similar price drop since the first half of 2015) and confirms the theory put forward by many that the housing market is slowing down.
Another variable that has fallen is the average amount of mortgages, despite an increase in volume. In July, the average mortgage was 0.5% lower than last year, at 139,100 euros. This is likely as a result of the price drop.
In recent weeks there have been several voices warning that the housing market could be close to a cycle change. The Economist newspaper assures us that it is a global trend that is being seen in major cities worldwide. The credit rating agency, S&P, believes that, in the case of Spain, the price slowdown comes on the back of a GDP slowdown and the Catalan political crisis.
Personally, I think there is trouble on the horizon. The Spanish property market appears to operate on a ten-year cycle, a decade of growth followed by a decade of price and sales falls. We are on year 11 following the crisis. Make what you will of that.