Spanish house prices have slumped to rock bottom, according to the official government figures.
The Instituto Nacional de Estadistica – National Statistics Institute- reports average home prices were 1.5% down to -14.4% in the second quarter of 2012 – the lowest figure since the INE started tracking them in 2007.
New house prices were down 1% to -12.8%, while older properties performed even worse, more than 2% down to -15.7%.
Although the figures showed prices recovered slightly in the quarter – from -5% in the first three months of the year to -3.3 in the second quarter, prices have slumped month after month since the third quarter of 2010.
Spanish house prices fall again
In a gloomy report, INE found that house prices had fallen in every Spanish region – with the biggest drops in The Canaries, tumbling 3.7% to give a year-on-year decrease of 14.3%, and Castilla y Leon, slipping 3.5 points to give a14.0% fall in the year.
A growing number of overseas buyers are swooping to buy Spanish property as values collapse and offer good returns on investment.
Newspaper El Pais published figures suggesting overseas buyers snapped up just over 9,000 between May and the end of July. a 12% annual increase and the most foreign purchasers seen in the country for four years.
Another survey, by online property portal Kyero showed prices falling 8.3% to €1,606.40 per square metre, encouraging even more foreign investors to the market.
Spanish homes are valued at their lowest since 2004, and look to fall even further as the government eyes an international bailout for the economy and no real end in sight for the eurozone debt crisis.
Canaries favourite for foreign buyers
The holiday islands of The Canaries are a favourite destination for overseas buyers – mainly from the UK, Northern Europe and Russia.
Credit defaults are an indicator of just how bad personal and business finances are in Spain.
In July, the rate was 9.86%, setting a record for the second consecutive month after reaching 9.42% in June. The Bank of Spain revealed debt in the country’s financial system came close to €170,000 million in July, an increase on June’s €168,370 million deficit.
“Due to the crisis and the continuing increase in unemployment in Spain, resulting in more and more people being unable to meet their debts, this indicator has now accumulated 13 consecutive months of increases in defaults,” said the Kyero report.