Spanish bank offers half-price homes

14th October 2010, Comments 1 comment

Spain's Banesto bank, a subsidiary of Santander, announced on Thursday the sale of 600 homes at 50 percent below the market rate as the country continues to struggle with the collapse of its housing market.

The bank said it wanted "to ease access to housing for citizens at a difficult economic juncture."

The bursting of the property bubble in 2008 plunged the Spanish economy, Europe's fifth-largest, into its worst recession in decades in 2008 and has sent the unemployment rate soaring to more than 20 percent, the highest in the eurozone.

It emerged during the first quarter of this year with tepid growth of 0.1 percent and 0.2 percent in the second.

Banesto said 50 second-hand homes located in different regions of Spain have been put on sale for 50,000 euros (70,000 dollars) each as part of a first lot.

"If the average national price per square metre for second-hand homes in the second quarter of 2010 is 1,850 euros, in this first lot it will be just over 900 euros," the bank said in a statement.

The bank will offer six further lots of 75 homes for less than 75,000 euros each. In Madrid and Barcelona, the most expensive cities in the country, a lot of 120 homes for less than 120,000 euros each is being put up for sale.

A rise in home sales in January was the first in three years, spurred by lower prices and more attractive interest rates.

Spanish property sales soared almost 30 percent in August on a 12-month basis, official data showed last week.

But there are still estimated to be around one million unsold homes in the country.

© 2010 AFP

1 Comment To This Article

  • Vejer property for sale posted:

    on 14th October 2010, 17:59:21 - Reply

    The boom bust process is repeated and we can expect a 5-7 year cycle. Although we all feel for the owners this method of selling for less than the perceived value will encourage the cycle and return to boom.