Dec. 15 (Bloomberg) -- Spanish home prices fell for the 14th quarter as unemployment surged and a reduction in mortgage lending crimped demand for property amid a slowing economy.
The average price of houses and apartments declined 7.4 percent in the third quarter from a year earlier, the National Statistics Institute in Madrid said today in an e-mailed statement. Prices dropped 2.8 percent from the previous quarter.
Spain is working through an excess of 700,000 new unsold homes left over from a 10-year debt-fueled housing boom. The highest unemployment rate in Europe, at 23 percent, is curbing demand, while banks are reining in lending amid a surge in bad loans and higher borrowing costs. Spain’s economy will probably contract in the fourth quarter after stagnating in the three months through September, Bank of Spain Chief Economist Jose Luis Malo de Molina said on Dec. 13.
The number of mortgages for home purchases dropped for a 17th month in September, falling 42 percent, the National Statistics Institute said on Nov. 24. Home sales in the third quarter declined 6.3 percent from a year earlier, the Ministry of Public Works and Housing said on Dec. 9.
--Editor: Jeffrey Donovan
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