Home sales plummet in Spain

Home sales in Spain fell by 30.4 per cent in the first three months of the year, according to official government statistics.

The drop in transactions serves to highlight the severity of the economic situation faced by the country and is another blow to the fragile property sector.

Sales slumped after a new law reduced or eliminated tax deductions on mortgage payments for most Spanish taxpayers from the start of 2011, Business Day reports.

According to the Ministry of Public works, some 74,540 home sales were recorded in the first quarter of the year, while the total home sales for the 12 months to the end of March 2011 amounted to 458,748 units.

This, the ministry noted, was 1.6 per cent down on the same period a year previously.

Only 35.2 per cent of the homes sold were newly built, persisting on a downward trend. Spain has an estimated stock of 1.5 million unsold homes, both old and new.

However, with sales down, vendors are expected to drop asking prices further still, with plenty of opportunities for individuals looking for property in Spain to pick up a bargain.

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