Home Sales Down 3.7% in May, Year-on-Year

Home sales returned to negative rates in May after falling by 3.7% compared with the same month in 2012, to a total of 26,222 transactions, according to official statistics released yesterday from the National Statistics Institute, based on the property transfers recorded in the land registries.

The May decline comes after sales increased by almost 11% in April (to 23,642 operations), and after a very negative month in March, with only 21,000 purchases. Housing prices are down, but maybe not enough, while the bank has considerably raised the price of mortgages.

May is usually the month of the year which marks the recovery of the housing market after the winter, as it reflects the transactions closed around March. According to the Statistics Institute, from April to May an increase in activity of 11.2% was registered, a seemingly good result until you consider that in 2012 this increase was 26.6% and in 2011 it was 27.8%.

Before that, in December 2012, and January and February 2013, home sales had registered year-on-year increases following the end of the tax benefits for home ownership which took effect from 1st January.

In any case, in 2013, the housing market is showing improvement over last year, with 147,044 homes sold so far this year, compared with the 137,933 that were sold up to May last year.

El Mundo reported that the year-on-year drop in home sales in May was due to the decline in the sales of new homes, since second hand housing transactions increased by 2.3%, reaching 14,661 sales. New home sales fell by 10.3% (to 11,561 transactions).

Most of the home purchase transactions during the fifth month of the year, namely 91.1%, were for private housing. The sale of this type of housing decreased by 2% to 23,881 operations, while public housing operations totalled 2,341, representing a decrease of 17.8% compared to May 2012.

By region, Andalucia continues to drive the market, registering 4,826 sales, while Murcia recorded the largest increase, of 19% for 900 transactions. Madrid (3,624 sales) and Catalonia (4,047) also recorded substantial increases, of 14.7% and 13.5%, respectively.

By contrast, the Basque Country (with 676 transactions) was the region which registered the largest decline, dropping by 28.1%, followed by Extremadura (-25.6) and Navarra (-23.7%)