Economic Statistics - unemployment, inflation, etc..

Sales, Savings and House prices

Household savings fell to 10% in Q1 '10, while in June car sales rose 25% ahead of the July 2% VAT hike... unsurprisingly falling by the same amount in July.

Car Sales are the thermometer of the current recession: in September '09 they rose for the first time in 16 months, reaching a rise of 18% (year on year) in January '10. The stimulus has now ended, but sales continued during the first half of 2010 due to the threat of higher prices with the 2% sales tax rise in July. With a 24% fall in July, the second half of 2010 looks gloomy for sales. Looking back they fell 41.3% in August '08 (compared with August '07) and by almost 50% in December. 2008 house sales were also way down on 2007, being hit both by hopes of falls in prices as well as the lack of credit. In April '09 the figure for new home building projects was -66.5%

The savings rate has finally risen. It rose to 24% of available income in the 2nd quarter of 2009. Previously, Spaniards were spending all: the rate fell 4 points to 10% in the year to Q2, 2007. Additional costs, such as mortgages, were in the area of 5.9%, while tax paid rose 16%. In 2007 income grew some 4.3% (cf also debt.)

House Prices Prices fell 8.3% in the 2nd quarter (09). This followed -2.8%% during 2008, the first year for 15 years the annual rate fell. The housing crisis is likely to be the main damper to the economy for the coming couple of years. An OECD report, January '07, considered prices are 30% over-valued, but finance minister Solbes replied that flats are still selling relatively easily. Higher mortgage rates and fears of risky debts have caused banks to start being more careful in recent months and certain districts are now showing falls over 3 or even 6 months. Commentators point to new flats being built even smaller and with fewer bedrooms, reflecting both sociological changes as well as financial restraints. Demand is still highest in city centres. In some regions, a requirement for new buildings to have solar panel generators has also added purchase costs, but which may help owners over the medium term with energy costs.
In 2005 Ministry sources say house prices rose 12.8%; the rise was 17.2% in 2004, 18.5% in 2003 and 17.3% in 2002. The five year rise for used homes to 2003 was 109%, the 7 year rise to end 05 was 150%, with the Balearics topping the charts showing a 300% rise over a decade. Home loans in 2004 averaged 124,719 Euros. The average price per sqm in June '06 was 1956€. Prices are above 3000€ in Madrid (3717), Basque Country(over 4000), Catalonia and Balearics. If you are looking for a good buy, try Ontinyent, Valencia where prices were just 825€. Of the 23 million homes in Spain, about one third are 'second homes'.
The Euribor interest rate used to set most mortgage payments, is now way down from over 5%, at around 1.24% (end September '09).

This article from the Financial Times details house price rises 2003-7 in several European countries.