Home sales Took off Prior to the VAT Increase

23 September 2010

This is the third consecutive increase and the greatest rate of growth in this category since 2005. According to the Ministry of Housing, sales have sustained the recovery that started in the fourth quarter of 2009, this being the third consecutive quarter of growth showcasing a 39.6% increase with respect to the first quarter of 2010. The growth spurt came just before the VAT increase took effect on July 1st and just a few months prior to the elimination of the tax deduction for home purchases (which will take place on January 1).

In the second quarter of 2010, 149,527 homes were sold in Spain, which represents a 24.7% year-on-year increase. Of all total home sales in the second quarter of the year, 45.4% (67,895) were new construction and 54.6% (81,632) were used.

New home sales in the first quarter of the 2010 increased by 4.6% with respect to the same quarter in 2009, whereas used home sales increased by 48.3%. The quarter-on-quarter rate of increase for new home sales (45.3%) is greater than that of used homes (35.2%). In the past twelve months, 495,684 homes were sold, which represents a 4.8% increase over the past twelve months.

All regions showed year-on-year increases in sales in the second quarter except for Navarra, Extremadura and Murcia. The greatest increase was in the Basque Country, followed by Asturias, Catalonia, Castilla y León, Madrid and the Balearic Isles.

In the past twelve months, transactions grew in all regions except for Andalusia, Navarra, Castilla La Mancha, the Canary Islands, Extremadura, La Rioja and Murcia. At the same time, the provincial capitals that registered the greatest increase in transactions in this period were Madrid, Barcelona and Zaragoza.

As regards sales to foreign residents in Spain, the second quarter of 2010 had a total of 8,765 – that is 46% more than in the first three months of the preceding year. Further, non-resident foreigners bought 700 homes.

For further information, please contact Mónica Regaño: mregano@mmmm.es