House sales continue to fall in Spain

House sales in Spain continue to fall with the figures for November 2011, which were released on Tuesday showing a 14.4 percent drop in comparison with the previous year. The figures released by the Spanish National Institute of Statistics, show 27,549 sales were completed in November 2011. The data continues the steep fall in housing sales that Spain has witnessed since August 2011 when there was a 38 percent fall in purchases compared with the previous year. The trend continued through September, when sales declined by 28 percent, while October witnessed an 18 percent fall. In this aspect November data appears to confirm that the decline is slowing down, especially bearing in mind that October saw only 22,482 sales, the lowest figure since 2007, when the method of calculation was altered. House sales for the second half of 2011 are well below the first six months of the year when the average was around 45,000 operations a month. Former Prime Minister Jose Luis Rodriguez Zapatero acted in the summer, reducing sales tax on new houses from 8 to 4 percent, in an attempt to help clear the backlog of newly constructed homes that remain empty, but the numbers show that his move, which has been extended by the new government of Mariano Rajoy, has so far been ineffective. November 2011 saw just 13,705 new homes sold in Spain with the rest of the purchases those of homes that had previously been occupied. Given the reluctance of Spain's banks to issue credit to potential homeowners and the short-term effects of the new government's spending cuts, it looks unlikely that the housing market will witness any major improvement over the coming months.