Is the property market finally turning a corner?

Madrid.—Spanish house prices fell 0.8 percent in the second quarter from a quarter earlier, official data showed yesterday, the smallest drop since the fourth quarter of 2010 and a sign the five-year property bust may be turning a corner.
National housing prices have risen only once on a quarterly basis since the third quarter of 2007 after the sudden end of a decade-long property boom spun Spain’s economy into a deep recession from which it is only just starting to emerge. On an annual basis, housing prices fell 12 percent, the lowest drop since the end of 2011, the Statistics Institute said. “I think we’re likely to see further price falls, but it does seem we’re starting to see some stabilisation,“ said Nicolas Lopez, analyst at Madrid brokerage M&G Valores.
“I don’t think prices are going to rise again soon, as we’ve seen in Britain, because here we still have an enormous stock overhang. For every person buying, there’s ten selling. Prices will remain stable for three or four years until that balance returns.” Industry estimates suggest there are around a million unsold new homes in Spain, many of which are in the hands of banks struggling to raise capital levels. Since mid-2007, the cost of property across Spain, including new and second-hand housing, has dropped by 36.7 percent, INE figures showed.