The average discount accelerated from 59 percent in 2012 and 42 percent in 2009, Carlos Masip, a Fitch analyst in Madrid, wrote in the report analyzing 7,406 properties sold since 2009.
“The sharp value declines highlight the dysfunctional state of the property market, characterized by a supply and demand mismatch,” Masip wrote in the report.
Spanish home prices have fallen 40 percent since their 2007 peak, according to Fotocasa.es and the IESE Business School. Spain’s bad bank, created last year to take real estate assets off bailed out lenders’ books, has started selling properties.
Fitch found that 44 percent of the repossessed properties included in mortgage-backed securities that it rates have been sold, compared with 31 percent in December 2011. That’s a result of banks’ “willingness to offload” properties and accept “deeper discounts”, it said.
While some market players are interpreting foreign interest in residential property as a “sign of market recovery,” Fitch said foreign appetite is “mainly driven by opportunist bargain hunting.”
To contact the editor responsible for this story: Andrew Blackman at email@example.com