April 28, 2016 / 5:37 PM / 2 years ago

New home sales in Santiago plummet in first quarter

SANTIAGO, April 28 (Reuters) - New home sales in Chilean capital city Santiago slid 41 percent in the first quarter of 2016, as buyers rushed to purchase houses and apartments last year before a change in tax law that would boost prices went into effect, industry group CChC said on Thursday.

“Many people that would have bought their home this year decided to do it last year so as not to pay the home tax that came about with the tax reform, so the fall in home sales was a predictable phenomenon,” said Marcela Ruiz-Tagle, sub director of research for the CChC construction industry group.

Sales of new apartments in greater Santiago fell 44.5 percent, while new house sales fell by 32 percent during the first three months of 2016. The CChC added that the number of homes sold fell in annual terms to 5,015 units in the first quarter 2016, from 8,561 units in the same period last year.

“(But) we must pay attention to how this process evolves in the future, because in a context of low growth, rising unemployment and greater credit restriction, a complex scenario for real estate activity could arise,” Ruiz-Tagle added.

Paz Corp, Socovesa, Salfacorp, and Ingevec, among others firms, participate in the Chilean real estate and construction sector. (Reporting by Gram Slattery; Editing by Bernard Orr)

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