Spain Home Sales Slump for 10th Straight Month as Recession Hurts Economy
Spanish home sales declined in December for a 10th month as the euro area’s fourth-largest economy relapsed into a recession that began in 2008 when a property boom ended.
Prime Minister Mariano Rajoy is battling to turn around a slump in the real-estate industry as unemployment rose to a 15- year high of 22.9 percent in the last quarter of 2011 and the Bank of Spain sees the economy shrinking 1.5 percent this year.
Less than two months since taking over from Spain’s Socialists, Rajoy’s People’s Party government has given the nation’s banks a year to increase provisions against 175 billion euros ($232 billion) of troubled real-estate assets in a bid to push down property prices and restore the flow of credit.
Spanish banks’ bad loans are mounting while deposits are lower and lending has dropped at the fastest pace on record, the latest available Bank of Spain data show.
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