Foreign spanish property sales up 27.2pc as market bottoms

Photo: Aitor Agirregabiria

Foreign buyers made up almost 20 per cent of Spanish property sales in the first quarter of 2014, according to the Spanish General Council of Notaries. International transactions jumped 27.2 per cent year-on-year, fuelled by coastal markets and Madrid.

British buyers continue to make up the biggest share of activity, accounting for 13.8 per cent of foreign sales, ahead of the French (10.5 per cent) and Russians (8.4 per cent). Interest from outside of the EU, though, is also on the up. Bolstered by the country's recently-introduced Golden Visa scheme, Chinese sales soared 83.1 per cent year-on-year, a sign that the appeal of the country's property market is spreading.

Indeed, Jason Ham, Head of Business at Lucas Fox, told CNBC via email at the start of the year that "the greatest growth markets for enquiries and property viewings came from the Far East market" in 2013.

Prices continue to fall, which has helped to attract British bargain hunters, but conditions are looking positive: according to the latest figures from valuations firm Tinsa, Spanish property values fell 4 per cent in May year-on-year, a significant improvement upon the 10.4 per cent annual drop in May 2013. Indeed, it is the lowest year-on-year drop in May since 2008.

The biggest declines were reported on the Mediterranean Coast, where prices plunged 7.9 per cent. Even there, though, this was the slowest drop recorded in four years. Perhaps most strikingly, all of Spain's house price indices are pointing to a similar trend; while some sales figures have been distorted in the past 12 months due to the government's temporary VAT discount, which saw transactions sped up before the end of 2012 and slow in 2013 to meet the window, price data from the Notaries, Tinsa and National Institute of Statistics (INE) are, as Spanish Property Insight notes, "remarkably consistent". The message? House prices may finally have reached bottom.

Sentiment is certainly positive. Sales in the Valencia region, according to the latest statistics from the Ministry of Infrastructure, totalled 11,659 in the first quarter of 2014, a rise of 31 per cent year-on-year.

"[The facts] are not just positive when we compare them with the first three months of last year," notes The Spanish Brick, wary of 2013's distorted statistics. "In fact, to find a trimester with [more transactions], we have to go back to 2010."

Alicante, in particular, has shown a strong recovery from turbulent economic times over the year's first three months. The sale of homes in the province jumped 24.3 per cent, while for the first time in several years, domestic demand also began to gather pace, increasing by 23.7 per cent.

Moving forwards in 2014, transactions continue to climb. According to the INE, Spanish home sales rose 5.3 per cent in April, up from the same month in 2013, to a total of 24,968. While previous increases have been largely attributed to Spain's low prices, is the country's housing market finally bottoming out, boosting its appeal further afield than just Britain? A report from PwC at the start of 2014 seemed to predict it would, highlighting Spain as one of Europe's best opportunities for investors this year, changing its label from a "no-go" to a "good opportunity".

"We are very confident in the Spanish market going forward," says Javier Ballester, CEO of Taylor Wimpey España, "and are moving ahead with the development of a number of our Spanish sites."