Property sales in Spain fall again

Residential property sales in Spain are still declining at an alarming rate with re-sales suffering the most, according to the latest figures from the National Institute of Statistics.

The data shows that property sales fell 33% in May compared with the same month last year. Although it is a slight improvement on April when the year on year fall was 48%, it is not inspiring much hope in the beleaguered property market.

The figures also show that April and May were the weakest months this year for sales.

Re-sales were down the most in May, a decline of 35%.

On a regional basis property in Malaga performed the best with sales declines of 12% on the Costa del Sol and 21% in Murcia. The worst areas was the Costa de la Luz where sales dipped 65% followed by Almeria where they went down 49%.

One reason behind some of the dip is a rise in the number of purchases that are falling through at the last minute. As the financial crisis deepens more sales are falling out of bed at the eleventh hour with purchasers facing tricky unforeseen circumstances, according to Chris Mercer, Director of Spanish property specialists Mercers.

‘We’ve certainly spotted a marked trend for house sales that are near, or at, completion and then break down at the final hurdle. The reasons are varied, but most relate to the current precarious global economic situation. Banks may withdraw their mortgage offer at the last minute, the purchaser perhaps suddenly loses their job or simply gets cold feet at the enormity of the financial commitment,’ he said.

The trend which is highly frustrating for agent, purchaser and particularly the vendor, is not likely to be shortlived, Mercer added.

It can be good news, however for some buyers, he explained. Disappointment on the vendor’s behalf at clinching a deal only to see it slip away will often make the property very attractive for the next buyer that comes along as the vendor becomes more desperate to sell.

‘If the next chapter of life was put on hold after the previous completion collapsed, this desperation can be quite significant. The second bite of the cherry could be much sweeter for the buyer,’ he added.

The depressing news is accompanied by a similar decline in property prices. The latest published figures from Spanish real estate chain Look & Find, shows that prices are down 30% since the start of 2008 to around 2004 levels. In a report it says that enquiries from buyers are increasing.

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