The Spanish property sector experienced one of its worst ever years ever in 2008. Property sales fell by 28.6% which has led to the sector adopting more aggressive sales policies and slashing prices in order to reignite demand. However, despite this fall, statistics relating to the last month registered by the Spanish National Institute for Statistics (INE) (a 28% drop) showed an improvement with respect to mid 2008 and analists hope that the fall in real estate sales has eventually stabilized at approximately 30% over the last few months after reaching 36% in August last year.

According to figures published today by INE the fall in sales has been more acute in second hand properties with falls of up to 39.3% (273,936 sales) compared to sales for new properties which only fell by 14.1% (284,493 sales). The figures published today by INE for 2008 show that transactions for private properties fell by 28.9% while transactions for subsidised housing fell by 25.5%.

The fall in sales has provoked an accumulation of surplus housing in Spain which is estimated to vary between 600,000 and 900,000 unsold new properties.

The fall in sales of new properties throughout 2008 is just 3.2% according to the Ministry of Housing or 10% according to the property evaluators Tinsa. In fact Tinsa predicts that this percentage will go up to a round 20% by the end of 2009 with 1.5 million unsold properties on the market.

In accordance with this prediction house prices would fall to levels seen four years ago just before the last property bubble had started to inflate.

The average number of sales in 2008 was 1,531 per 100,000 inhabitants. Murcia was the province which registered the most sales per 100,000 inhabitants with a total of 2,347 transactions followed by Castilla-La Mancha (2,183), La Rioja (2,145), Cantabria (2,003), Andalucía (1,900), the Comunidad Valenciana (1,892), Extremadura (1,717) and the Canary Islands (1,533).

The Basque Country fell below the average for the number of sales per 100,000 inhabitants at 1,093, followed by Catalonia (1,066), Galicia (1,160), Madrid (1,238), Navarra (1,325), Aragón (1,439), Castilla y León (1,482), Asturias (1,497) and the Balearic Islands (1,519). In Ceuta and Melilla 648 and 834 properties were sold for every 100,000 inhabitants respectively.

In absolute terms Andalucía registered the highest number of property sales at 120,478 followed by the Comunidad Valenciana (74,706), Catalonia (62,090) and Madrid (60,919).