In the upmarket Madrid neighborhood of Arroyo del Fresno, red flags bearing the insignia of Banco Santander SA flutter atop a building site nestled between a medical center and a metro station. Instead of caution, they may signal that Spain’s six-year property crisis is receding.
Spanish home prices are poised to fall the most on record this year, leaving one in four homeowners owing more than their properties are worth, as the government forces banks to sell real-estate holdings.
Offers to buy Spanish homes fell short of the asking prices by 23 percent on average last year, damping expectations that the nation’s residential values have reached bottom, according to Idealista.com.
A decree that forces Spanish banks to make provisions for losses related to real estate had the “immediate´´ effect of lowering asking prices for residential properties, according to a study by Idealista.com, Spain´s largest property website.
Spanish home mortgage approvals rose in March for the first time in almost four years, adding to signs that the property market is stabilizing six years after triggering the worst recession in the country’s democratic history.
Spain’s bad bank is offering seven rented residential blocks for sale in Madrid, Barcelona and Guadalajara, taking advantage of demand from international investors building rental-home businesses in the country.
Prices for Spanish homes fell 3.4 percent in the first quarter from the previous three months as the euro area’s fourth-largest economy shrank and reduced mortgage lending crimped demand, according to Idealista.com.