35 percent slowdown in sale of resale property in Spain

35 percent slowdown in sale of resale property in Spain
Data from the National Statistics Institute, INE, has shown a 27% fall in the number of property sales in January this year compared to last. The fall in the sales of new property was 14.6% and in resale property the fall was as large as 35.6%.
The amount of capital lent over the month was 13,395 billion €, down just under 28% over the year, as a total of 61,792 properties changed hands across the country.
The average mortgage amount in January was 142,793 €, just over 3% less than a year previously and 0.7% down on the month of December.
The slowdown is set to continue with the Euribor interest rate on the rise again. The constructors association has called on the Government to increase the tax breaks for those who are purchasing their home, so as to stimulate demand.The Cosmani real estate company has suspended payments with debts of 350 million. All the debt is for monthly interest payments, and not considered too serious as the construction firm has assets of 1.6 billion. The problem comes from a lack of cash, with a fall in sales and a lack of credit.The Minister for Tax and the Economy, Pedro Solbes, has said that the inflation suffered in Spain is down to the world economy, and thus out of his direct control, but figures just released show that foodstuffs and energy rose by 25% more in price here when compared to the rest of Europe. Only in Eastern Europe did prices raise by a greater amount over last year according to the numbers.
However Spanish agriculture increased in price over last year less than elsewhere in Europe. Vegetables were up by 8.7%, but some cereals were 50% higher.The number of new companies created in Spain has fallen by 4% as the economic slowdown continues. 2007 saw 143,620 new companies being created across the country, about 6,000 fewer than the previous year. It’s the first fall to be seen since 2001.
Part of the reason for the slowdown is the greater difficulty in the current climate of obtaining a credit.