It's That Time of the Month!

Despite the field day today's press is having with the 25% drop in number of houses in 2009 sold compared to the prior year, the December statistics released today by the INE reveal merely more of the same monotony that is this writer's ideological lifeblood. Some boring details:

• Year-on-year, total sales decreased 0.4%, new sales 4.3% and second hand increased 4.3%;


• The 12-month rolling sum of total sales is approximately flat compared to November - the difference being a decrease of exactly 108, or 0.03%. Splitting new from used produces nothing worth the effort of having done it;


• If anything draws the eye as mildly exciting it would be that December sales were only 7.7% below those in November. December, between Christmas and the national holidays on the 6th and the 8th of the month, comes up short at least one week of work days. In 2007, intermonth sales dropped 22%. In 2008, the figure was 10%.

Displaying a coincidental timing, Banco Santander's private banking arm, Banif, released a report stating that real estate prices would have to fall '27%' in order for the market to clear. The finanzas.com article failed to make clear whether this was a proposed total drop, or a description of what remains. On the other hand it did distract us with yet another version of exactly how big the outstanding housing stock for sale is in Spain.

It appears that Banif's calculations place this at (we think - the choice of vocabulary is a little odd) 610,000 new finished, 380,000 under construction and 520,000 second hand - totalling 1,510,000 units. The first figure may be alright. The third should be taken with the big grain of salt shaken out by the widespread Spanish habit of permanently pricing homes just out of reach of any reasonable bid. The very definition of 'for sale' comes into question. Most unusual, though, is the claim that there are just shy of 400,000 under construction. This only makes any sense if one counts those on which work has been stopped. Jumping on the M-50 from the Carretera de Andalucía to get yourself to Majadahonda, say, will give the reader a first hand look at dozens and dozens of skeletal, unfinished apartment buildings. Next to none of them have construction cranes attached. Unless labour is now so cheap that builders can hire sherpas to schlep cement up to the top floor, the only conclusion is that they are not yet homes, are not for sale in any but a hypothetical sense, and they are not about to be either of the foregoing in the near future. An alternative version of this statistic might be that Banif is softening up its clientele in advance of yet another bout of really bad news from one of their real estate funds.

In light of the above, we think it appropriate to again post our totally unscientific 'years to clear' chart. We think it's self-explanatory, but questions may be directed to the comments section.

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