Property Prices in Spain More Pain

0% and have only dropped 10%. The biggest house price falls to come are likely to be in the holiday hotspots where many overseas buyers have bought and will be lead by the Banks.

Banks are now Spain’s biggest property owners having repossessed property as loans went bad. Bank owned property is often lower priced with huge discounts available however BNP Paribas Real Estate, the real estate arm of French bank BNP Paribas, argues that banks in Spain will start having to offer discounts of 50% in 2010 to shift some of their stock of property.BNP Paribas Real Estate says present discounts not big enough to make sales.

The price drops could well be lead by the Banks who are now the biggest owners of Spanish real estate. BBVA, Spain’s second largest bank says that Spanish property prices were 30% over-valued, but have only fallen 10% so far.

Pundits suggest that the biggest Spanish property price falls will come where they are the most unsold homes. That could mean that areas around Madrid and Spanish hotspots such as Malaga (Costa del Sol), Castellon (Costa Azahar), and Tarragona (Costa Dorada) could see cut price Spanish properties in 2010

Spanish banks need to offer huge price discounts in 2010 to sell off massive stock of properties

Banks in Spain, now the country’s biggest property owners having re-possessed so many homes, will have to offer discounts of up to 50% in 2010 if they are to shift their stock of real estate, according to a new report.

Current discounts are simply not big enough to interest buyers, says the report from BNP Paribas Real Estate, the real estate arm of French bank BNP Paribas.

The prediction comes as analysts point out that it could take years for the Spanish property market to recover. According to Acuna & Asociados, highly regarded Madrid real estate analysts, it could take six or seven years just to clear the huge numbers of empty homes that won’t sell.

The firm’s annual report indicates there are 1.67 million properties for sale in Spain including 500,000 new builds, 500,000 resales and the rest are buildings that have yet to be completed.

Indeed, the latest report from BBVA, Spain’s second largest bank, also indicates that a recovery will be slow and drawn out over several years.

Spain’s Zapatero Says Economic Recovery “Imminent”

MADRID – “The growth train is very close,” Spanish Prime Minister Jose Luis Rodriguez Zapatero said on Thursday, announcing measures to improve economic competitiveness and labor markets in a country where some 4 million people are unemployed.

“If we do what we should and rigorously apply all the reforms in progress, this train will increase its velocity until it acquires that necessary to restore job creation,” the Socialist premier said in Madrid before leaving for Brussels to attend a European Union summit.

He pledged to push changes aimed at ensuring the long-term stability of Spain’s pensions system, as well as labor market reforms that “strengthen companies without weakening the workers.”

Conditions Worsening In Spain's Real Estate Market

Costa Blanca, Spain

Spain’s house price bubble burst a long time ago. The Bank of Spain’s figures say the peak was in early 2008 (based on official valuations). Realtors say the peak was in mid-2007 (based on offers-for-sale). Whichever is true, two years later, in Q3 2009, Spanish house prices continue to fall.

Official figures show the average price of houses in Spain at €1,903 per sq. m. in Q3 2009; down 0.94% from the previous quarter, 8% from the same period last year, and 9.45% lower than the March 2008 peak (Bank of Spain data). In inflation-adjusted terms, house prices were 0.52% down on the quarter, 7% on the year, and 10.58% from peak.