By David Landford (property writer)
According to the Spanish National Institute of Statistics, property transactions in February 2011 were 10.5% higher than February 2010. The number of transactions in February was 45,607 (50.2% second hand properties plus 49.2% brand new properties).
It means than property transactions has increased two months in a row (January and February).
This increase in sales goes along with further falls in property prices. According to the property prices index from the leading company TINSA, property prices dropped an average 3.7% in March. Such fall also means that the average dropped since the prices peak (December 2007) is 19.3%. A higher prices fall is experienced in the Mediterranean Coast (27%) and also in the Canary and Balearic islands (20%).
Properties for sale in Spain are reducing their cost rapidly and have been reducing ever since the economic downturn struck the global economy. Spanish property in 2011 has been selling at a higher rate to numerous buyers, both foreign and domestic. And the Spanish Property forecast is looking good, especially for buyers.
There were a large number of transactions in November and December 2010. Spanish property in 2011 was at the end of the tax exemption offered to property buyers. There are many things to keep in mind for the sales year of 2011, such as the lack of credit of buyers, the rise of the interest rate on houses and the increase of second-hand houses coming onto the market as well as the large stock.
The biggest problem is that the banks are not offering credit to the buyers of properties as much as credit is offered to developers of the properties to obtain the land. The land itself is overvalued, but it has millions of Euros invested in it. The urban land in Spain is devalued by 65% while the rural land has depreciated by over 90%.
Land speculation of properties for sale in Spain boomed and because of that, speculation of land by developers became an easy money maker. The previously mentioned credit was given to the developers to speculate with instead of to develop the land. Analysts are pessimistic about the prices of land, many say the land price itself is simply symbolic.
Another unfortunate problem with the Spanish property forecast is the amount of below average property available. Second hand property is all too often below standard in one way or another and trying to sell this with even 50% discounts can be a difficult undertaking. The pace of the transactions is going too slowly, therefore even having offers increased by 20% in the second half of 2010 is not reducing the stock enough to make it purchasable. Properties for sale in Spain are not intended to rise anytime soon unfortunately.
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