Spain's home sales dip in first quarter

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SME Times News Bureau | 23 May, 2013
The 54,512 home sales recorded in Spain in this year's first quarter represent a decline of 21.5 percent from the same period in 2012, the development ministry said.

Foreigners were the buyers in 17 percent of the transactions.

The decline in the first quarter reflects the impact in the sector of the end of the tax deduction for buying a primary residence and the increase in the levy on new home sales from 4 percent to 10 percent.

By way of comparison, during the first quarter of 2006, before the bursting of the real estate bubble, 233,669 homes were sold.

Transactions made by foreign residents in Spain grew for the seventh consecutive quarter by 5 percent to 8,457, or a record 15.5 percent of the total.

Home purchases were concentrated along the Mediterranean coast and in the Canary Island.

Non-resident foreigners bought a total of 792 houses, 40 percent more than the number purchased during the first quarter last year.

Construction for many years was the motor of the Spanish economy but the bursting of the bubble in the sector in 2007 had a decisively negative impact on economic growth and resulted in a massive stock of unsold homes.

The Spanish government is considering granting residence permits to foreigners who buy a home in Spain.