House prices drop by 3.2 per cent in Spain
16 January 2009
The Spanish government has confirmed that house prices dropped by more than three per cent last year.
This contrasts sharply with the 18.5 per cent increase in property values recorded six years ago.
However, the government has insisted that the 3.2 per cent decline does not represent a housing crash.
Anunciacion Romero, an official at the housing ministry, described the drop as a "desirable moderation" in house prices.
He told the Associated Press that the economic boom over the last decade had pushed property values up so high that they did not reflect their actual worth.
This is the first time that house prices for an entire year have dropped in Spain since the early 1990s.
The country's flagging economy recently prompted to credit ratings agency Standard & Poor's to place it on the CreditWatch Negative list.
As a result, it is likely that its rating could soon be changed to a lower category.
This contrasts sharply with the 18.5 per cent increase in property values recorded six years ago.
However, the government has insisted that the 3.2 per cent decline does not represent a housing crash.
Anunciacion Romero, an official at the housing ministry, described the drop as a "desirable moderation" in house prices.
He told the Associated Press that the economic boom over the last decade had pushed property values up so high that they did not reflect their actual worth.
This is the first time that house prices for an entire year have dropped in Spain since the early 1990s.
The country's flagging economy recently prompted to credit ratings agency Standard & Poor's to place it on the CreditWatch Negative list.
As a result, it is likely that its rating could soon be changed to a lower category.
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