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Spanish Home Sales Fell 26% In December
16 February 2009 @ 23:30

Spanish home sales fell 26% on the year in December, pointing to a continued correction for Spain's once-flourishing home-building industry, according to data from the country's National Statistics Institute, or INE, released Monday.

For the whole of 2008, home sales fell 29%, the INE said.

Spanish home sales fell 36% in November and 28% in October.

Demand for new homes in Spain began to fall in 2007 after prices reached nearly three times their 1997 levels and after years of overbuilding. Demand collapsed last year after the U.S. subprime mortgage crisis ushered in much tougher financing conditions and battered confidence.

Over the last decade, housing investment has grown to account for nearly 10% of Spanish gross domestic product, which is more than twice the euro-zone average.

The sharp retrenchment of housing investment helped push the euro zone's fourth-largest economy into recession in the second half of last year. Likewise, unemployment is rising faster in Spain than anywhere else in the euro zone as its labor intensive construction industry sheds hundreds of thousands of jobs.

Spain posted a 13.91% unemployment rate in the fourth quarter, the highest in the euro zone.

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