Spanish sales up 45% but few golden visas

Spain’s notaries record a huge increase in sales in the year, but it’s no thanks to the golden visa

A new report from the General Council of Spanish Notaries has found that:

Spanish residential sales in Q1 2014 were up 45%
Mortgage loans for house purchases in Q1 2014 up 48.3%
Average mortgage loans in Q1 2014 up 8.5%
Sales in the year to March up 37.6%
Average price per square metre down 4.8% to ?1,248 in year to March.

However Mark Stücklin of Spanish Property Insight, quoting data from the Spanish National Institute of Statistics (INE) which showed annualised sales rising by 26% to March, says the underlying trend can be put no more optimistically than “bottoming out”. He says that the 26% rise is largely due to tax changes that have distorted the market. On the plus side, what sales increases there have been were on the tourist coasts, such as Benidorm (pictured above) and that many agents selling overseas are having a vastly improved year.

Quite so, says Chris Mercer, Director of Mercers and a veteran of Spanish property since 1984, who has recorded 60% better sales in 2013 than 2012, and a further rise of 60% year-on-year in Q1 2014. But he says that real recovery will never happen until the banks start lending more: “If the Spanish government really wants to give its economy a shot in the arm, the banks should relax their lending criteria… The maximum loan-to-value for non-residents in Spain today is around 60%. However, the purchaser also needs to pay up to 15% of the purchase price in taxes and fees so, unless you’re buying a bank repossession where they may lend up to 100% or more, you really need easy access to around half the money to buy a Spanish property. This debars a large number of people who require larger loans.”

Certainly last year’s supposed rescuer of the Spanish property market, the golden visa, has been insignificant, says El País. Figures to 5 May 2014 show that it has attracted just 72 property buyers (out of 81 visas issued in total) in the first seven months of its operation. In comparison, Portugal issued 318 in the first year for its own residence-for-investment programme. Chinese and Russian buyers took half the visas on the Spanish programme, with Ukraine, Lebanon, Ecuador, Qatar, Egypt and Iran taking most of the others.

Source: www.opp-connect.com