Housing sales drop in Spain for second straight month

Housing sales in Spain fell in October for the second straight month, official data showed Monday, reversing eight months of gains for the nation’s ailing property sector and fueling fears of renewed economic weakness.

A total of 27,198 homes were sold during the month, a 17.7 percent drop from October 2009, according to figures released by national statistics agency INE said.

The decline follows a trend that began in September when house sales fell 4.1 percent over the same year-ago period.

During the first ten months of the year housing sales are up 8.9 percent over the same period in 2009.

Spain’s economy, the fifth-largest in Europe, entered recession at the end of 2008 as the global financial crisis hastened a correction that was already underway in the construction sector, the driver of more than a decade of economic growth.

The slump in the building sector has spread to other areas, pushing the unemployment rate to 20 percent, the highest level in the 27-nation European Union.

The Spanish economy emerged with tepid growth of just 0.1 percent in the first quarter of this year and 0.2 percent in the second but then slipped back to zero percent in the third and the slump in housing sales had added to pessimism over the recovery.