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October 16, 2014

Analysis of the situation of the property market in Spain in 2014

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Analysis of the situation of the property market in Spain in 2014

More real estate is sold and more mortgages are issued because the property prices in the country continue to fall, according to the College of Notaries.

The number of transactions for the purchase and sale of real estate in August 2014 amounted to 17,045 transactions, up 13.9%  annually, according to the latest report published by the General Council of Notaries. A breath of fresh air in a sector where in July 2014 was registered the decline in the number of real estate transactions.

Growth in sales of residential real estate in recent months is due, in particular, the normalization of the number of operations after the completion of a tax deduction for the purchase of property in the personal income tax at the end of 2012, but also reflects the stabilization of the monthly sales. From January to August 2014 the number of monthly transactions was 28.023, this figure is higher than in the same period last year in 18.8%, namely 23.589.

In addition, the issuance of mortgage loans for the purchase of housing increased by 31.5% in August 2014 on an annual basis, in accordance with good prospects, which causes the housing sector in Spain in recent months. However, the average amount of the mortgage was reduced by 8.9% to 103,630 euros.

At the same time, mortgage loans issued for new construction in August, showed an increase of 4.0%, and it was granted 233 new loans. The average amount of their equals 240,679 euros.

According to the Spanish notaries, such improvement in the country’s property market has been made possible because housing prices continue to decline, namely by 8.6% in August 2014 Thus, the average price per square meter was 1,111 euros, which represents a decrease of 41.4% since the crisis began in 2007.

This reduction in cost per square meter of housing due primarily to the reduction in average price per square meter of one-family homes (-25.8%) in annual base. The price of second homes,ower, registered an increase of 0.8% year on year, while the new homes registered an increase of 2.3% on an annualized basis.

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