Two Years of Declining Spanish Property Sales
February 15th, 2010
The number of houses sold in Spain fell 0.3 percent in December from a year earlier, the 24th straight month of declines, the National Statistics Institute said on Wednesday.
The drop compared to an annual fall of 2.6 percent in November and a record slide of 47.6 percent in April.
The sale of homes fell 7.7 percent in December from November, the data showed.
Spanish banks have been told by the Bank of Spain to devalue the housing assets on their books by 20 percent, El Mundo reported on Wednesday, citing sector sources. The Bank of Spain was not immediately available for comment.
Spain’s banks hold an estimated 100 billion euros ($137.1 billion) worth of Spanish property, the newspaper said, taken on over the last couple of years as property companies went bankrupt and their creditors forced to mop up their unsold assets.
Analysts are concerned the country’s banks have been keeping a lid on potential losses by valuing the homes on their books at pre-crisis levels, while real property prices have dropped by more than 14 percent from their high in 2007.
Spain’s second largest bank BBVA shocked investors at the end of January when it reported full year earnings with higher than expected provisions, raising broader doubts about Spanish banks’ ability to absorb a property market crash.
Story from Interactive Investor
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