Aside from there having been nearly nothing interesting to write about over the last while, circumstances themselves have played their part in keeping us from the keyboard.One, as a direct or tangential result of the terrific amount of rainfall that fell over these parts this winter, we find ourselves desperately trying to catch up on work in the olive groves that should have been done much earlier. That means a regular diet of 10 or 11 hours out of the house every day. Not particularly conducive to reflection - and no end in sight for at least a couple more weeks.
Second, a recent visit to a local doctor complaining of chronic listlessness turned up a serious surfeit of red blood cells circulating about the writer's plumbing. Doubtful as we were of the quack's assessment that this condition might be related to our three pack a day Ducado habit, we nonetheless gave him the benefit of the doubt and (mostly nearly almost maybe) gave up smoking, putting an end to an excellent run of 44 years. Among the discoveries attendant on this change of custom was that we were suddenly less prone to darkly ruminate on, well, whatever and everything related to that. Reminds us of the comment made a long time ago by someone who had attended a reading by Lou Reed - that since he'd stopped being a junkie Reed had kind of 'lost his edge'.Today, though, our employees and their boss decided to cut the day at a normal length instead of putting in that extra two hours that has been the recent regime - giving the writer the opportunity to wake up from a siesta for the first time since who knows when, turn on his computer and find that the INE has released February's house sale statistics. The results are in the charts on the left.
Fully aware that sales remain at a very low level of volume, it is nonetheless interesting to note that transactions involving new homes are at their highest since September of 2008 and used and total sales since October of that year. The rolling 12-month sum of new home sales shows its first month-on-month increment since April of 2008.
The point we've been making at Ibex Salad since it seems like forever is that a collapse of the housing boom would not result in a similar fate for prices. Note that sales dropped 65% from January, 2007 to April of 2009. Think what one might of house price statistics that indicate a mere 10 or 15% drop over the period, this has not played out the way the Anglo pundits called it - by any stretch.
New readers interested in knowing why we are on the verge of declaring victory on this one might spend some time going through the appropriate blog category. It's called 'Real Estate Economy'.
An Aside
Last Thursday, we closed our most recent punt at a small loss. It was not behaving the way it was intended and we have no free time to deal with errant offspring at the moment.
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2 Comments:
Congratulations on giving up smoking even if it means yet more tax losses for the government.
Regarding the little recent surge in property sales, I'm wondering if this is not because a lot of prospective house buyers who earn more than 17,000€ p.a.(which must be the vast majority), are taking action before the changes in tax deductions for mortgages come into effect in Jan 2011. A buyer earning more than 24,000€ can expect to lose around 30,000€ in tax deuctions over an average mortgage. To this figure we can add a few thousand more for the VAT increase in July.
If you believe that prices have reached their lowest point, you'd certainly be keen to sign the deeds this year and even if you go along with BBVA's opinion that prices will fall 8% in 2010, you might not want to bet on an uncertainty.
A similar thing is happening with car sales; very buoyant at the moment while the PlanE subsidies last and before VAT goes up.
But what is going to happen with demand and prices once theses subsidies/tax deductions are removed? Logically you might expect a compensating fall in demand for houses after 2011 and perhaps a downwards movement on purchase price as buyers need to recover their tax losses.
Saludos, Chris.
You could be right, Chris. But even so, if these are offers signed 2 or 3 months prior there's still over a years worth of that kind of purchase pending.
Cheers
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