DECEMBER 15, 2011, 9:26 A.M. ET

Spanish House Prices Tumble


By DAVID ROMAN

MADRID—Spanish house prices fell at their fastest pace in two years in the third quarter, as the country's three-year property bust continues to take a toll on the euro zone's fourth-largest economy.

House prices decreased on average by 7.4% in the third quarter from the same period a year ago, with prices of used homes down a whopping 9.6% in the period, the country's statistics agency INE said Thursday.

This compares with a 6.8% fall in second-quarter house prices, and marks the third consecutive quarter of accelerated price drops after prices stabilized somewhat in late 2010. The reading also represents the third-biggest quarterly fall in house prices since the sector went bust in early 2008.

The data comes as Spain's incoming Prime Minister Mariano Rajoy is considering cleanup plans for the country's ailing banking sector, including the possible creation of a state-funded "bad bank" to acquire impaired property loans.
[SPHOMES]

Overall, Spanish banks hold over €400 billion ($520 billion)—equivalent to 40% of Spain's gross domestic product—in loans to the construction and real-estate sector, backed by collateral that loses value as property prices slide further. In addition, the central bank estimates that around €180 billion in loans to builders and developers is "potentially problematic."

These bad assets are choking off the flow of credit, and making international investors wary of investing in Spain.

Spanish house prices have tumbled since the country's property bubble burst in 2008, and they are down around 25% from that peak, official estimates show.

Spanish House Prices Tumble - WSJ.com

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El WSJ pertenece a la Corporación News Corp. del Magnate Rupert Murdoch en la que Jose María Aznar tiene un puesto en el Consejo de Administración.
Si Aznar, que consiguió que el WSJ alabara al Real Madrid en su editorial cuando el Barça le dejó fuera de la Champions, no puede evitar que el WSJ diga esto con la victoría electoral con mayoría absoluta del PP tan reciente... es que la cosa está, muy, pero muuuuy jodida!!
Capitulation is coming!!