There were 491,061 transactions during the year, well below the peak of 950,000 in 2006, the housing ministry said.
Sales plummeted 12.4 percent in 2007, a slump that accelerated with a decline of 32.6 percent the next year, when the bubble burst on the property market, and a fall of 17.8 percent in 2009.
The collapse of the sector plunged the Spanish economy into its worst recession in decades and sent the unemployment rate soaring to more than 20 percent.
It emerged with meagre growth rates in the first half of last year and posted a contraction of 0.1 percent for all of 2010.
The latest data on property sales will come as welcome news for the government which is fighting to convince nervous investors that it will grow enough to bring its massive public deficit under control without resorting to a Greek or Irish style bailout.