A cleanup of real estate on the books of Spanish banks will contribute to a decline in property prices that will make homes available to more people, Economy Minister Luis de Guindos said.
Spanish banks are “filling up” with real-estate assets such as apartments that aren’t going to market because they’re not being priced properly, de Guindos said in an interview with state broadcaster TVE today. When they are priced at their real value “we’ll find that the price of housing in Spain will fall more, there’ll be an adjustment and it will be available for a lot more people,” he said.
Prime Minister Mariano Rajoy’s government has pledged to cleanup real-estate assets such as building land and unfinished apartment complexes that have piled up on the books of the country’s banks as part of its strategy to bolster growth and confidence in the economy. Spanish lenders have 176 billion euros ($228 billion) of “troubled” assets related to real estate on their balance sheets, according to the Bank of Spain.
House prices, which more than doubled in the decade through 2007, turned negative in the first quarter of 2008 and have since fallen by about 17 percent, according to the Ministry of Development and Public Works. Prices fell 8.2 percent in 2011, accelerating their slide, and sellers should brace for further declines this year, the property website Idealista.com said last month.
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