Property sales show first year on year rise in two years

PALMA AND MADRID
THE number of houses sold in the Balearics and Spain in general rose in annual terms for the first time in two years in January, a positive sign although economists warned fully-fledged recovery would take time.

At a national level, house sales rose 2.1 percent in January year-on-year, the National Statistics Institute said, compared to an annual fall of 0.3 percent in December 2009 and a record slide of 47.6 percent in April last year but here in the Balearics, property sales during January were 12.5 per cent higher than during the same period last year indicating a very real revival in the real estate market.

NEW PROPERTIES
During the first four weeks of the year, a total of 760 property deals were closed compared to the 675 during January, 2009 and 434 of those sales involved new properties.

The news has been welcomed by the real estate sector which watched business fall by 35 percent during the course of last year.
The figures follow a Housing Ministry report earlier this week showing sales rose 4.1 percent quarter-on-quarter in the last three months of 2009.
But analysts say there is still a way to go for a property market whose collapse has kept the Spanish economy in recession longer than most of its Western European peers. “Demand has risen because prices have become more accessible and have returned to the state of equilibrium. Prices will remain stagnated for some time,” said chief economist at Intermoney, Jose Carlos Diez. “Spain must sell off the excess (housing) stock, and we certainly won't be seeing a boom in Spain such as the one we saw a few years ago.” Month-on-month house sales have been rising since spring of last year, he added.
The official data showed the sale of homes rose 19 percent in January from December.
Unsold new homes totalled more than 1 million units at the end of 2009, according to the government, a backlog which is expected to take years to clear.

Since the global credit crisis brought the decade-long housing boom to an abrupt halt in 2008, house prices have officially fallen 14 percent from the peak but some economists say the slide has been steeper.

House value indices in Spain are based on asking prices, but economists note that final prices, after buyer-to-seller bargaining, have dropped much further. “We're unlikely to see important rises for two or three years, but it's fair to say prices have stabilised after such sharp drops,” said economist at M&G Valores, Nicolas Lopez.