The first quarter home sales plummeted in Spain

The sales of houses fell 30.4 percent in the first quarter of 2011 in Spain, compared to the same period last year, according to figures published by the Spanish Ministry of Public Works Wednesday.

The year 2011 began with a sharp decline in house sales, due partly to the end of the government policy of giving tax incentives to homebuyers with an income above 24,000 euros a year. This policy came to an end as a result of the government's fiscal reforms which are aimed at reducing the country's deficit.

The first three months of 2011 saw 74,540 operations confirmed, a huge drop in comparison with the 150,268 transactions which took place between October and December 2010, although it should be pointed out that this number was inflated as homebuyers rushed through their purchase in order to assure they were eligible for the tax benefits which ended at the end of the year.

The Public Works Ministry published the data just a week after the Bank of Spain published a gloomy prediction for the Spanish housing market. The bank of Spain predicted that housing prices would continue to fall by a further 10 percent between now and 2013.

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