Spain Property Sales Dropped 41% in January

A 41% year on year drop in Spanish property sales was recorded in January this year according to the National Institute of Statistics, reports Spanish Property Insight.com. Sales fell from 56,378 transactions in January last year, to 33,528 this year.

Sales of new homes dropped by 29%, which is perhaps the worst statistic given that many thousands of new homes are still under construction across Spain, translating to increasing oversupply and further severe price corrections throughout the country.

The Costa del Sol was the location where property sales fell by the lowest rate, but even there transactions in January this year were down 26% on the same time last year.

Such a massive drop in sales so deep into the crisis would seem to indicate that even the people who can afford or get finance to buy aren't doing so, dampening hopes of a recovery in the Spanish property market anytime soon.

However, if the Euro drops in value against Sterling, as is expected later this year, and takes another 15-30% off prices overnight, it is likely we will see the same green-shoot reporting we have for the UK property market when weak-pound-attracted overseas buyers fuelled a sales increase, that will inevitably turn out to be temporary.

The Spanish property market became so dependent on overseas lifestyle buyers that it may not recovery until several years after the economies in countries that its buyers come from recover completely.