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Repossessed properties in Spain are worth 48 percent less on average than the value assigned when their mortgages were originated, according to Fitch Ratings.

Declines range from 37 percent to 57 percent, analysts Juan David Garcia and Carlos Masip in Madrid wrote in a report analyzing 11,000 repossessed homes bought with loans from banks including Banco Santander SA and Bankia SA. The mortgages are in asset-backed securities with high loan-to-value ratios, typically of more than 80 percent.

“Fitch expects property prices to continue falling, due to the recessionary environment and severe dislocation of the Spanish property market,” Garcia wrote. “The speed of additional correction in prices will largely be driven by financial institutions’ foreclosure management strategies.”

Only 31 percent of repossessed properties have been sold as a result of the poorly performing economy and the reluctance of financial institutions to manage “forced” property sales, Fitch said. Stricter rules introduced in February will create incentives for banks to dispose of assets more quickly, the ratings company added.

Spanish home prices fell by the most on record in the fourth quarter as the euro area’s fourth-largest economy shrank and a reduction in mortgage lending crimped property demand.

The average price of houses and apartments declined 11.2 percent from a year earlier, the most since the measurement began in 2008. Prices dropped 4.2 percent from the previous quarter and are down 21.7 percent from the market’s peak in the third quarter of 2007.

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