Spanish home prices fell for the 10th quarter as sellers scaled back their demands in a bid to complete sales before interest rates rose, deterring potential buyers.
The average price of houses and apartments declined 4.6 percent in the three months through March from a year earlier, the Housing Ministry said today on its website from Madrid. Prices dropped 2.5 percent from the previous quarter, in the 12th quarterly decline.
Spain, which has the highest unemployment rate in Europe after almost two years of recession, also has the highest ratio of outstanding floating-rate mortgage loans in the region, according to data compiled by the European Mortgage Federation.
“Rate rises discourage buyers and sellers dropped asking prices before rates increased to encourage sales,” said Fernando Encinar, head of research at Idealista.com, Spain’s largest property website.
The European Central Bank raised the benchmark interest rate to 1.25 percent on April 7 after keeping it at a record low of 1 percent since May 2009 to fight the financial crisis.
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