Spanish Home Sellers Cut Asking Prices After New Bank Rules Are Passed
A decree that forces Spanish (BBVA) banks to make provisions for losses related to real estate had the “immediate´´ effect of lowering asking prices for residential properties, according to a study by Idealista.com, Spain´s largest property website.
A total of 10,654 homeowners who use the website reduced asking prices in the seven days after the Feb. 3 decree, a 30 percent increase from the weekly average in the four weeks prior, Idealista said in an e-mailed statement.
Sellers lowered asking prices by an average of 9.5 percent, erasing a total of 279 million euros ($363 million) from their overall value, according to the statement.
“We knew that home prices would continue to fall this year but that the velocity of the decline would be set by banks,´´ said Fernando Encinar, co-founder of Idealista.
Banks have taken on hundreds of thousands of properties through foreclosures and canceling loans to developers. They have a year to make about 50 billion euros of provisions against real estate, according to a decree passed by the Spanish Cabinet earlier this month. Economy Minister Luis de Guindos said on Feb. 2 the measures would prompt a decline in home prices.
“Individual homeowners are changing their mentality and are prepared to take less money now than face a greater loss in the future,” Encinar said.
To contact the reporter on this story: Sharon Smyth in Madrid at firstname.lastname@example.org
To contact the editor responsible for this story: Ross Larsen at Rlarsen2@bloomberg.net