Spain : Spanish home sales plunge in first quarter

The news showed Spain's property sector still fragile three years after a housing bubble exploded, destroying millions of jobs and plunging the country into a recession.

Sales slumped after a new law reduced or eliminated tax deductions on mortgage payments for most Spanish taxpayers from the start of 2011.

In the first three months of the year, Spain recorded 74,540 home sales, the Ministry of Public Works said in a statement.

Only 35.2 percent of the homes sold were newly built, persisting on a downward trend, the ministry said. Spain has an estimated stock of 1.5 million unsold homes, both old and new.

Total home sales for the 12 months to the end of March 2011 amounted to 458,748 homes, 1.6 percent fewer than in the same period a year earlier, the ministry said.

Spain's economy stabilised last year, shrinking by just 0.1 percent, after sliding 3.7 percent in 2009 because of the property bubble collapse and global financial crisis.

The destruction of jobs related to the property market is widely considered Spain's gravest economic problem. Unemployment soared to 21.29 percent in the first quarter of this year, the highest in the industrialised world.