Spain Home sales rise slightly after five quarters of decline

Home sales (both new and used) rose 1.8% in the first quarter of the year, the first increase after five consecutive quarters of decline, and totaled 160,884 transactions, according to the latest data published on Thursday by the Ministry of Housing and Urban Agenda.
This slight increase in transactions comes after home sales fell 11% in 2023, a year marked by the slowdown caused in the market by successive interest rate hikes and the consequent rise in the cost of financing, leaving behind two years of increases after the worst of the pandemic.
Despite this annual decline, and with the exception of the high figures seen in 2022, when transactions reached their highest level since 2007, the number of sales in 2023 (638,522) was the third highest in 16 years.
In a full year, home sales reached their maximum level in 2006, when, in the midst of the real estate boom, they approached one million units.
For its part, the minimum was set in 2013 with 300,000 transactions after the bursting of the real estate bubble.

Used homes drive the market

By type of housing, the vast majority of sales registered in the first quarter of 2024 were for free-market housing (156,096), up 2.2%; the rest (4,788) were protected housing, down 10.3%.
Second-hand free-market housing continued to drive the market, accounting for 142,521 sales, 2.5% more than a year earlier.
For its part, new-build free-market housing saw 13,575 transactions up to March, in line with those observed in the same period of 2023.

Down 4% from the previous quarter

Compared to the previous quarter, the fourth quarter of 2023, home sales, both new and used, fell 4%.
Specifically, second-hand sales fell 2.7%, while new sales fell to a greater extent, 14.5% month-on-month.
Between January and March, there were 29,698 home sales by foreigners, both residents and non-residents.
Specifically, foreign residents in Spain closed 16,848 home sales, while non-resident foreigners accounted for 12,850.
By autonomous community, the highest number of home sales in the first quarter of 2024 was registered in Andalusia (31,095, down 0.5%), followed by the Valencian Community (27,357, up 4.6%), Catalonia (23,938, up 1.4%) and the Community of Madrid (19,443, in line with the first quarter of 2023).

Additional notes:

  • The Spanish housing market is expected to remain relatively stable in 2024, with prices rising by around 2-3%.
  • Sales are expected to moderate compared to 2023, but remain at a healthy level.
  • The second-hand market is expected to continue to be the main driver of sales.
  • Foreign buyers are expected to continue to play an important role in the market, particularly in coastal areas.

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