Bigger price falls required in Spanish market

Property prices in Spain need to fall by at least another 27 per cent if the oversupply in the market is to be absorbed, it has been claimed.

According to the private banking arm of Santander, Banif, home values in the country have not fallen enough, Spanish News has reported.

The financial body suggests that the Spanish economy will not be in a position to create employment until at least 2012 - given that it would require a GDP growth of 2.5 per cent or more, something which will be "difficult for Spain in 2011".

Meanwhile, the news comes in the wake of comments made by RR de Acuna & Asociados which said that the glut of homes which currently sits vacant in the Spanish property market will take at least six years to clear.

The consultants explained that rising unemployment is helping to erode demand for real estate in the country, Bloomberg reported.

Unemployment in Spain has more than doubled in the past two years to 20.8 per cent - currently the highest level in the eurozone.

Like this? Then share with your friends and colleagues!