Home sales improve in September, but have been negative for seven months

Showcase of a real estate agency in Madrid, last August.EFE

Home sales have not just raised their heads in the official statistics.

According to the data released this Thursday by the National Institute of Statistics (INE), last September 37,839 houses were sold, which represents a fall of 1.1% compared to the same month in 2019. It is a minimal decrease and, for the evolution of the market compared to July and August gives the impression that it is on the verge of growing again.

But even so it is a fall and it has been seven months, all since the coronavirus pandemic reached Spain, with negative figures.

If to this is added that in January the INE also registered a decline in sales and in February the growth was by the minimum (0.1%), the general outlook for 2020 is bleak.

In the first nine months of the year, 302,381 homes were sold, which is 22.1% less than between January and September of last year.

In other words, more than one in five operations have disappeared.

Despite everything, September leaves some sign of hope.

The first, the fact that the 1.1% fall is laughable compared to what the sector had been dragging.

In August the year-on-year decline was 12.1% and in July it was 32.4%, the evolution is therefore positive.

In fact, if September is compared to August, operations grew in a month just over 20%, which is a sign of reactivation.

In fact, for the Federation of Real Estate Associations (FAI), the figures "show a real estate market in the normalization phase after the initial period of confinement."

Although that same organization, which brings together nearly 900 agencies with 4,000 professionals from all over Spain, warns in its assessment that "the progressive slowdown in demand, in the face of an economic context of uncertainty, is causing an extension of the average sales time of properties and price readjustments are already appreciated around 5% ”.

The effect of a sector at a turning point between growth and decline is also observed in the different evolution of the autonomous communities.

In the ninth month, 10 registered more sales than in September 2019 and seven registered fewer.

In the second group are the main regional markets and also those in which foreign buyers have a greater role (with the exception of Andalusia, where purchases grew 6.5%).

Extremadura (53.3%), Asturias (46.9%) and La Rioja (38.6%) were the territories with the highest year-on-year increases, while the Basque Country (-23.8%), the Balearic Islands (-15.1 %) and Navarra (-15%) had the biggest drops.

The new house, shot

Other positive indicators appear when differentiating the type of properties.

Free housing, which is the one that dominates the market, fell by 0.6%, compared to the decrease of 6.4% in protected housing.

From the point of view of the age of the houses, the extraordinary growth of new homes stands out once again, whose sales are up 29.2% compared to September 2019. It is an effect that has been observed since the first deconfinement started and it surely responds to the greater urgency of promoters and individuals to close this type of operations and to the bagging of the same that occurred in the state of alarm from March to June.

On the contrary, second-hand houses, which are the majority in the market, remained 7.4% below 2019 levels in September.

The official statistics do not include other characteristics of the homes in their series of sales.

This Wednesday, notaries released their data and also pointed to a huge divergence between sales of single-family homes, which are skyrocketing, and those of block flats.

In that series, the market for home sales did grow 5.4% in September, which bodes well for the future evolution of the INE.

The divergence between the figures of one and the other is due to the fact that the INE drinks as the source of the records, which is why it reflects the moment in which a deed is elevated to the public registry, compared to notaries who compute is when it is produces the signature.

As a consequence, the experts consider that the notarial statistics show between one and two months in advance what will later be seen in the official series, so it is to be expected that the INE figures will continue to improve in successive months despite the new regrowth of the disease.

However, it will be in any case a slight improvement, since no one expects a significant rebound in the market nor have notaries perceived it that way.

Anaïs López, Head of Communication for the Fotocasa portal, points out that "the slight drop this September may make us think that we may soon begin to collect positive data".

In the Idealista portal they agree that "the data shows the strength with which the market received the de-escalation process."

But in the statement that they have sent to the media they also assure that "it is not prudent to launch a message of normalization of the number of operations since the month of September 2019 was still affected by the errant entry into force of the Mortgage Law."

Indeed, in June of last year a new regulation of loans began that weighed down the market for a couple of months due to technical problems.

This fall, due to the lag in the official statistics, was reflected in the data for August and September, so this year's comparison is made over a month with a lower level of sales than would be usual.

The INE data presented this Thursday also reflects a growth in sales of the rest of real estate assets. In fact, housing is the only category that fell in September, while the rest of urban properties (where there is room for lots, premises and even garages or storage rooms) rose 1.6% year-on-year. Greater was the jump of rustic farms, whose sales soared 30%. From the point of view of transmission modalities (in addition to sales, the statistics consider all the other possibilities for a property to change hands), the positive evolution of swaps (27.3%) and donations (25, 1%). Inheritances (10.3%) also grew more than all purchases (5.4% for the entire set of properties and not just homes).