The latest data released from Spain's General Council of Notaires shows that residential property sales in the country increased by 7.3% in November last year, compared with the same month in 2014.
The figures show just over 18-months of continuous growth in Spain's real estate sector, reflecting increasing buyer interest in the country, set to extend well into 2016 and beyond. Furthermore, analysts believe growth is sustainable, with price growth stability.
A breakdown of the data shows that apartment sales increased by 6.2% year-on-year, more than double the increase recorded in October 2015. This was largely due to transaction volumes of new apartments which increased by 8.3% and resale apartments 12.2%.
Sales of individual family homes also saw strong growth, up 11.4%, recording nine months in a row of double digit increases. However, sales of new housing fell for a tenth month in a row, down in November by 18.6%.
In the new-build market, the issue holding back price growth is lack of supply. This dynamic is slightly misleading however, as there is a vast supply of unfinished and empty housing stock across Spain that is mostly held in bank inventory.
As this inventory is released and made available to buyers, it could serve to prevent Spain's property market from overheating in the face of significantly increased buyer-interest. In the meantime, the supply issue is likely to affect price volatility in certain regions of the country.
The average price of homes sold in November was €1,219/m2, a fall of 1.1% year-on-year. A breakdown shows that apartment prices fell by 0.6% and the price of individual family homes fell by 0.8%. The data also shows that the price per square metre of second hand apartments fell by 0.7% year on year to €1,320 although new apartments increased by 5.9% to €1,666.
The total number of new mortgage loans also increased by 7.3% year on year in November but in seasonally adjusted terms this figure moderates to an increase of 2.4% year on year, the lowest increase in 18 months.
Spain's economy remains hampered by high unemployment rates and a significant public deficit. However, tourism has been booming in the country and its contribution to the economy continues to grow. In the regions of Spain popular with holiday home buyers and investors, property prices are set to continue to rise throughout 2016, albeit at a meandering pace.
As with all property markets, there are anomalies that present themselves as opportunities for value growth and savvy investors can still find such opportunities in Spain.