Spanish annual house prices fall for first time in over a decade
Spanish annual house prices fell 3.2 percent in the fourth quarter of 2008 over the same time last year.MADRID - Spanish annual house prices fell 3.2 percent in the fourth quarter of 2008 over the same time last year, the housing ministry said Thursday, the first such decline in more than a decade.
The average price per square metre of property fell 2.4 percent on quarterly basis after a 1.3 percent drop in the third quarter, it added in a statement, as the real estate sector -- which had been an engine of economic growth -- slumps.
The annual decline in house prices in the fourth quarter was the biggest since the housing ministry started tracking the data in 1995.
Spanish media said it was the biggest drop since 1993 when Spain last faced a housing crisis and recession.
Last month Spain's second-biggest bank BBVA forecast that house prices in Spain, which have posted one of the steepest rises in Europe over the last decade, will fall by about 25 percent in real terms by 2011.
Spain currently has about one million unsold homes and the glut of unsold properties will continue to rise in 2009, leading to the drop in prices, the bank said.
After a decade-long building frenzy, home sales dropped this year due to rising interest rates and the international credit crunch that have put mortgages out of reach of a growing number of people.
Home sales in Spain fell by 36.4 percent during the third quarter of 2008 over the same time last year to 118,533 units, according to housing ministry data.
The slide in the real estate sector has spread to other areas, pushing Spain to the brink of recession and bringing the unemployment rate to 13.4 percent in November, the highest rate in the 27-nation European Union.