Spanish Property Sales Continue to Slide

 

Official data released by the Government has revealed how Spanish home sales fell by 41% in the second quarter of 2011 (April to June) when compared to the same period for 2010 - a much larger fall than the 30% seen in Q1 of 2011.

The decline has been attributed in part to the abolishing of the tax deductions allowed on property purchase, which came to an end on 31st December 2010, and had been introduced in 2008 at the start of the property crash.

Another, and perhaps more valid reason is the overall state of the Spanish economy, the high rate of unemployment and the reluctance of lenders to take any chances with risky mortgage loans.

The government have already noted the fall in house sales following the re-introduction of the housing tax, and have recently introduced a similar measure intending to stimulate the housing market, which reduced the tax payable on new-build property from 8% to 4% until the end of the year.

With an estimated 1.5 Million properties on the market in Spain at the moment, and with just 90'747 property sales recorded in Q2, there is still some way to go before the glut will subside and prices stabilise.