House sales in Spain in 2020 and what does the future hold?

Recently, the Spanish Statistical Office (INE) released its annual figures for 2020. It is no surprise that house sales in Spain have fallen. The pandemic, caused by the Coronavirus, has left its mark. The number of houses sold in Spain in 2020 fell by almost 18%. In absolute terms, a total of 415.748 registered sold homes. With this total, the Spanish house sales are back at the level of 2011. Of these 415.748 properties sold, almost 20% are new builds. The other 80% are existing properties. 

Until 2018, the housing market showed an upward trend. In 2019, sales decreased . In 2020, the decline continued. Due to the impact of the consequences of Covid-19. Like economic uncertainty. A complete lockdown between March and May and the many travel restrictions. As well as the fact that the “Registros de la Propiedad” (Spanish real estate registry) closed during the state of alert.  Even this had an impact on the number of transactions. The decline relates to both new builds and the existing housing market. 

Number of houses sold per month in 2020

January           46.927

February         44.104

March              34.806

April                25.042

May                 22.394

June                27.221

July                 32.654

August             31.394

September       37.839

October           37.605

November        39.653

December        36.109

Most properties were sold in Andalusia, Catalonia, Comunidad de Valencia and Madrid. But even among these top performers, there was a decline in property sales. The fewest homes sold were in Cantabria, Navarra and La Rioja. The biggest decrease compared to 2019 was in the Balearic Islands. Followed by the Comunidad de Valencia and the Canary Islands. In the Comunidad de Valencia, despite the large decrease, they sold most properties. 1469 per 100.000 inhabitants. Alicante was the province with the highest number of properties sold per 100.000 inhabitants. 35% of these purchased by non-Spaniards.

In 2020, foreigners bought 46.300 properties in Spain. A decrease of 26.5% compared to 2019. The British purchased the most, followed by the French and Germans.

The figures seem dramatic at first glance. Yet they are better than in 2008 when the global financial crisis led to a 29% reduction in one year.

Those who want to dig into the figures and background can access the entire report of the INE here.

The future

Idealista is Spain's leading property portal. They predict a return to normal levels of property transactions by 2021. Idealista and Spain's Fotocasa even question whether there will be a price drop at all. And if so, whether it will be as sharp as some expect.

The respectable Standard & Poor (S&P) also has a vision for the future. They believe that potential homebuyers should not wait too long. The expectation is that prices will first fall, followed by a sharp rise. S&P expects a price decrease of 1.4% for Spain. A rapid price increase follows this fall. Think about an increase right below 2%. This trend will already be visible in 2021. For 2022 experts expect an even stronger price increase or Spain. This increase could reach up to 4.5%. All in all, it means that Spain will experience one of the largest price fluctuations in one year. From a decrease of 1.4% to an increase of 4.5%. S&P expects that this trend will also occur in other countries. You can think of Portugal, Ireland and the Netherlands.

How Orange Villas experienced 2020

We would be lying if we said we did not notice anything of the pandemic. The year had a slow start, as usual. During the total lockdown, the entire real estate sector was down. But, the moment it was possible to travel again, we were busy as before. To the extent that Orange Villas had to increase its staff. The market was hot and the number of deals exceeded expectations. The trend we saw was that especially the cheaper segment (up to EUR 350.000) did well. As well as the expensive segment (over EUR 1 million). With the return of the travel restrictions, the number of sales decreased. But, given the circumstances, we did great. We continued to sell. We adapted to the Corona situation. Introducing remote video viewings, working with proxies and much more. And with success.

In our office, we see homeowners who are in doubt. Is this the right time to offer our home for sale. The answer is: YES! Even in a difficult market there are buyers. Our experience is that there are less buyers, but those who are here are very serious. Don't forget that they are taking the trouble and the risk to travel in Corona time. You don't do that if you want to orientate yourself without any intention to buy. Then there is the local market. Spaniards from the cities who are looking for a holiday home on the coast. As well as foreign residents who want to move. There are always opportunities. A nice example is the sale of a property by one of our top sellers at the end of 2020. In the morning she visited the property to take it for sale. In the afternoon she sold the house. The sale of this house went so fast that it was never listed on our website. Not long after, we sold another villa, which we had shortly before included in our books. We only needed one week to list and sell this property. Some owners are afraid of viewings because of possible contamination risks. The Orange Villas team and our clients do everything possible to prevent infection. Mouth masks, hand gel and if required, gloves. 

It is difficult to predict what the future will bring. There are various noises, and it is all a matter of guesswork. The best thing is to keep a close eye on the market yourself and make a decision with common sense. Once you have made up your mind, the professional team of Orange Villas will be there to guide you. Whether this is to list your property with us or to find your new home. In any case, take a look at our website to see if there is anything for you.