New rules likely to increase Spanish distressed property listings

The number of distressed properties available in the Spanish real estate market may triple next year as lenders look to offload their assets.

According to property advisory company RR de Accuna & Asociados, new accounting rules will prompt lenders to get rid of their depreciating homes.

About 100,000 houses and apartments previously owned by banks are now on the market, Fernando Accuna, co-founder of the firm, told Bloomberg news.

"Lenders took on an immense amount of property from developers and homeowners and now they're being forced to offload the deadwood," the expert explained.

The company estimates that real estate values in the country will fall by 20 per cent over the next five years, with the heaviest declines happening in 2011.

Under the changes set to be introduced by the Bank of Spain, lenders must take account of a drop in value of at least 30 per cent if they hold onto their assets for more than two years.

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