Bankia Estudios | Property transactions in the Spanish market have plummeted. Home sales fell sharply in May: only 22,394 transactions, the worst month of May in the available series since 2007, and less than half of the transactions recorded a year ago (48,351 in May 2019). In any event, the deterioration reflects the logical effects of the sector closing down due to the state of alarm. In the second half of the year, the reactivation of the economy, the labour market and, above all, family income will determine the behaviour of demand.

The state reference system for rental price indexes, which indicates that Madrid, Barcelona, Malaga, Valencia, Malaga, the Canary and Balearic Islands are the main “stressed” areas, has 11.2 million data on rentals for the last four years. It will be updated annually with information on 1.7 million properties and 33,662 census sections.

Investment funds have €40 billion to spend in the Spanish real estate market in the short and medium term, according to a survey carried out amongst 200 funds and investors by Cushman & Wakefield. Of the total interviewed, 51% expect to maintain their investment strategy in the coming months despite the virus. This compares to 33% who are reconsidering their risk profile and 16% who are evaluating different asset classes.

The sale of homes registered a total of 501,085 transactions in 2019. This was due to the decline in second-hand housing transactions, as new home purchases increased 1.2 %, says the National Statistics Institute (INE). On the other hand, housing prices continued to rebound, according to Q4’19 statistics from the Spanish housing registers.

The average price of housing in Spain in 2019 increased by 3.6% last year. Only in December it experienced an increase of + 1.2%, according to the real estate valuation company Tinsa.  The Mediterranean coast accumulates three consecutive months of price falls.

C. Ocaña and R. Torres (Funcas) | After several years of recovery, Spain housing market shows signs of deceleration, opening a debate about whether this is the prelude to the outbreak of a new bubble. At present there is no real estate bubble in Spain and, therefore, the effects of the slowdown in the real estate sector itself and in the rest of the economy will be limited. In other words, in the current scenario, an adjustment can be expected but not a “flat tire” of the real estate sector.