New figures show that there was an increase in the number of property sales in Spain in 2010 with buyers spending more on homes than they did in the previous year. Whilst the report suggested a positive attitude towards the Spanish property market heading into 2011, other data has shown that property prices in Spain fell in the first quarter of this year for the tenth consecutive period.
Spanish property transactions rise
Recent figures from the Spanish Ministry of Housing showed that there was a 5.9 per cent increase in the number of sales in Spain compared to the previous year. In addition, data from the Bank of Spain showed that foreign investors spent 2.9 per cent more on property in 2010 than they did in 2009.
The final quarter of 2010 showed the highest year on year improvements, suggesting that overseas investors were finally returning to Spain to take advantage of low cost property.
Spanish property prices fall for tenth consecutive quarter
However, whilst there have been positive noises surrounding the struggling Spanish property market, the Spanish Ministry of Housing also recently reported that the average price of houses and apartments fell by 4.6 per cent between March 2010 and March 2011. Prices fell 2.5 per cent from the previous quarter; the tenth consecutive quarterly decline.
The European Mortgage Federation also found that Spain, which has the highest unemployment rate in Europe after almost two years of recession, also has the highest ratio of outstanding floating-rate mortgage loans in the region.
Fernando Encinar, head of research at Idealista.com, Spainââ¬â¢s largest property website, said: ââ¬ÅRate rises discourage buyers and sellers dropped asking prices before rates increased to encourage sales.ââ¬Â
The European Central Bank recently raised the benchmark interest rate to 1.25 per cent after maintaining it at a record low of 1 per cent since May 2009 in a reaction to the global financial crisis.
