Property sales fall for third consecutive month

 

Sales of Properties in Spain fell for the third consecutive month in May as high levels of unemployment and excessive austerity measures reduced the demand for homes.

Earlier today the National Institute of Statistics (INE) reported how property sales had decreased by 18.3% on 2010, following a year on year drop of 29.7% in April - the biggest fall seen since May of 2009.

Average house prices now stand 15% below the peak prices seen in 2007, just before the property crash, with many experts estimating that prices need to fall to 30% under peak until a recovery in the market can be seen.

With a surplus of over 700'000 residential properties, the government scrapped a tax rebate on mortgage payments of as much as 1,352 euros a year, but gave potential buyers 12 months' notice of this to encourage them to bring forward purchases. The measure was successful in bringing more buyers to the market, but since the rebate was removed at the end of 2010, stagnation has returned.