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ARCHIVED - Home sales in Spain back to 2007 levels
The experts believe that another property bubble in Spain is unlikely
The property market in Spain has been recovering at a more rapid rate than any other sector, with 46,242 sales completed in October alone, the highest number since 2007, right before the first property bubble burst. Prices have risen by more than 4% and the mortgage market has now returned to 2011 levels.
It is important to note that the figures have changed dramatically over the last 14 years. In October of 2007, more than 58,500 transactions were closed while this year, only 46,242 house sales were recorded. These unprecedented numbers hadn’t been witnessed again until now, but the property market began to decline in 2008 before crashing completely in 2013.
According to Spain’s National Institute of Statistics (INE), the sector has experienced year-on-year increases of more than 20% for eight consecutive months, with new house sales growing by 21.6% in October to 9,344 and resales jumping up by 22.4% to 36,898.
Only the Basque Country and Asturias experienced a decrease in the housing market while the most notable increases were observed last month in the Balearic Islands (+57.7%), Cantabria (+41.2%), La Rioja (+41.1%) and the Valencian Community (32.7%).
Those in the real estate industry are not unduly worried however, and believe that another property crash is unlikely even though the barrier of 45,000 purchases has already been exceeded seven times this year.
Regarding house sales in October, the director of studies at Fotocasa, María Matos, has explained that “this figure shows a moderation compared to recent months, since the trend has been going upward since April. The most important thing is that prices are not growing at the same rate and are being contained.”
In addition, there is far less liquidity in the banks than there was before the property bubble burst, and financing isn’t as readily available as it once was. Back in 2007, mortgages tended to be granted at around 150% of the value of the property whereas now, the figure is at 70%, and so "the current situation is not the same as it was 14 years ago."
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