Spain is one of the nations to see the biggest annual fall in residential property values around the world, new research has revealed.

In the Knight Frank Global House Price Index, the European country was ranked 45th out of 51, experiencing a year-on-year drop of 5.5 per cent between the third quarter of 2010 and the same period in 2011.

However, the firm commented that the latest set of data indicates that Spain - as well as the other nations in the PIIGS (Portugal, Ireland, Italy, Greece and Spain) group - may be "over the worst".

The report stated: "Although prices in all five housing markets continued to fall, the pace of decline slowed in all but Portugal."

According to the findings, the Spanish property sector saw values slip by 1.3 per cent between the second and third quarters of 2011.

Figures published last month by Global Property Guide painted a more optimistic picture of the health of the real estate industry in the country, recording a lower quarterly price drop of 0.83 per cent.