Sales of Homes Moderates Fall to 11.3% in 2012

February 22nd, 2013

In 2012, despite the end of tax incentives for home purchases, 319,058 home sales transactions were carried out, 11.3% fewer than in 2011, and a more moderate decline than registered in the previous year, of 17.7%, and in 2008 and 2009, coinciding with the crisis in the sector. According to the year-end data published this week by the National Statistics Institute, the biggest crashes were recorded then, with housing sales sinking by 28.8% and 24.9%, respectively.

This trend contrasts with the 6.3% growth which was recorded in 2010, when housing sales rebounded months before the elimination of the deduction for the purchase of a main residence for middle and high incomes became effective.

All in all, this real estate indicator remains far from the figures reached in 2007, when in the middle of the sector boom sales of homes approached 800,000 transactions in a year.

After a 17-month streak of declines, sales rose again in August just after the Government announced the end of the deduction for home purchases and the VAT increase for such transactions, which looked likely to be a factor that would boost operations before the end of the year.

Despite registering the largest decreases of the year in the first three months of 2012, with declines of 26.3%, 31.8% and 22.7%, respectively, the downward trend moderated gradually over the following three months to stand at around 10%.

El Pais reported that after falling 2.5% in July, transactions returned to register positive rates again in August, posting a rise of 3%. September and October also closed with gains of 0.9% and 12.8%, respectively. However, this positive trend ended in November, when housing sales fell again by 6.1%.

In December, a month before the new tax changes, sales rose by 2.3%.

For the whole year, sales of new and used housing fell by 9.3% and 13.2%, respectively, to 158,074 and 160,984 transactions, while private housing fell 10% to 280,816 transactions and public housing fell 20% to 38,242.

In 2012, the total number of property transfers recorded in the land registries per 100,000 inhabitants were highest in Castilla y León (7,185), La Rioja (6,841) and Castilla-La Mancha (6,717).

Likewise, the only regions showing positive annual variation rates in the number of property transfers were Valencia (3.5%) and Castilla-La Mancha (0.1%). In turn, those showing the highest decreases were Cantabria (-11.4%) and Galicia (-11.1%).

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