Spanish home prices fell for the 13th quarter as unemployment remained above 20 percent and a reduction in mortgage lending crimped demand for property.
The average price of houses and apartments declined 6.8 percent in the three months through June from a year earlier, the National Statistics Institute in Madrid said today in an e- mailed statement. Prices dropped 1.2 percent from the previous quarter.
Spain is working through an excess of 700,000 new unsold homes left over from the debt-fueled housing boom. The highest unemployment rate in Europe, at 21 percent, is curbing demand, while banks are reining in lending amid a surge in bad loans and higher borrowing costs.
“You can only sell in today’s market by reducing prices, because banks are not being flexible with lending and there is no foreseeable improvement in the unemployment rate,” said Fernando Encinar, head of research at property website Idealista.com.
The number of Spanish mortgages for home purchases dropped 42 percent in June from a year earlier, the sharpest decline since January 2009, the National Statistics Institute said on Aug. 29. Home sales in the second quarter dropped 40.8 percent from a year earlier, the Ministry of Public Works and Housing said last week.
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