The latest housing data from the official statisticians of Spain showed house sales in the country plummeted further in April.
The 9.9% year-on-year drop was the 14th consecutive monthly decline, according to Spain’s National Statistics Institute (INE). House sales in April were at their lowest since the onset of the real estate crisis in 2008. But the monthly fall was slower than that of the prior three months, according to the agency. The continued fall came despite Madrid’s reinstatement of tax breaks for homebuyers in December and the freezing of VAT on house purchases at 4%.
The drop in house prices, down 7.2% during the first quarter, and the sharpest quarterly drop since the third quarter of 29, has so far failed to spur sales. Observers noted that the factors that banks restrict lending and unemployment remains an average 25% contributed hugely to the plummet.
The banks suffered a major hit at the time of the recession in 2008 and still hold a significant amount of distressed real estate. They are still struggling to adjust prices in an attempt to shift the estimated 800,000 residential units from their balance sheets. However, the announcement that Spain’s banks will receive a €100bn bailout from the EU may lead to a reactivation of credit, the development ministry noted.
INE said Madrid, Catalonia and the regions of Andalusia and Valencia saw the largest volume of house sales, accounting for 60% of the total during the first quarter.