Spanish Property Sales Down by 30%

Spanish third quarter house sales fell 30.5 percent year on year, steepening a fall begun earlier in the year amid chronic oversupply and credit restrictions, according to a recent report.

Spain's College of Registrars recorded 130,884 house transactions between July and September, down 8.6 percent from the previous 3 months, according to a press statement.

The average value of Spanish mortgages declined for the third straight quarter, falling 3.94 percent year-on-year to 140,193 euros, the statement said.

Hindering sales are expectations Spanish house prices will fall further, having declined around 15 percent in the last year, according to some private sector estimates.

Banks are restricting mortgage lending due to financing problems and soaring bad loans as unemployment rises faster in Spain than any other large European country.

Most analysts say Spanish house prices will fall up to 30 percent, though some see greater declines as the end of a decade-long residential construction boom coincides with credit market turmoil.

Weighing on the market is a backlog of anywhere between 500,000 and 1.5 million unsold new homes, according to government and private sector estimates.

Developers are expected to cut prices further to sell stock and rebalance house supply with demand.

Story from Forbes

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