Spanish house price decline slows: data
Spanish housing prices eased their decline in the first quarter of 2010, official data showed Tuesday, but analysts warned that significant risks remain for the key sector.
Property prices fell 2.9 percent between January and March compared with the same period last year, the National Statistics Institute (INE) said.
That compares with a decline of 4.3 percent in last three months of 2009 and 7.0 percent in the quarter before that.
It was also the smallest drop since prices slipped 0.3 percent in the second quarter of 2008, when Spain's property sector began to collapse as the global credit crunch pulled the plug on a decade-long boom in the sector.
On a sequential quarterly basis, house prices fell 1.2 percent in the first three months, the INE said.
The bursting of the property bubble plunged the Spanish economy, Europe's fifth-largest, into its worst recession in decades and has sent the unemployment rate soaring to more than 20 percent, the second-highest in the European Union.
"The Spanish housing market appears to be through the worst, signalled by decelerating house price falls," said analyst Raj Badiani of IHS Global Insight.
But he warned that the property slump could extend into 2012 as "new risks are emerging."
He noted a record fall in consumer confidence in May as well as the central bank's call for banks to put aside reserves of up to 30 percent against their property holdings.
"This could force the ailing savings banks to dump their repossessed property onto an already deflated market, with the stock of unsold properties soaring past one million in the first half of 2010," he said.
© 2010 AFP