Drop in Spanish housing prices gains speed in Q2

16th July 2009, Comments 0 comments

Property prices in Spain dropped 8.4 percent annual rate in the second quarter as compared to the first quarter.

Madrid – The drop in housing prices in Spain, where a property bubble burst last year, picked up speed during the second quarter of 2009, falling 8.4 percent over the level at the same time last year, the housing ministry said on Wednesday.

By comparison, housing prices fell at a 6.8 percent annual rate in the first quarter and a 3.2-percent annual rate in the fourth quarter of 2008 as builders struggled to unload inventories accumulated during a decade-long property boom.

Housing prices fell in the second quarter of this year by 1.9 percent over the first quarter to an average of EUR 1,920 per square metre (10.76 square feet), the housing ministry said in a statement.

Spain recorded its first annual drop in average housing prices in over a decade last year, dropping 3.2 percent over the previous year, as the global credit crisis and chronic overbuilding pummelled its key property sector.

The slump in the building sector has spread to other areas, pushing the unemployment rate to 18.1 percent in April, the highest level in the 27-nation European Union and more than double the average for the bloc that month.

A study by Spain's second-biggest bank BBVA last week forecast that housing prices in Europe's fifth-largest economy would fall by nearly 30 percent between 2008 and 2011 before they start to recover.

AFP / Expatica

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