real estate

Pace of house price deflation picks up at start of the year

Market in prolonged slump as banks seek to offload property on their books

Madrid -

The ongoing fall in house prices in Spain accelerated in the first quarter of this year as the housing market remained in a five-year-long slump and as banks sought to offload property on their books.

According to figures released Thursday by the National Statistics Institute (INE), house prices fell an average 14.3 percent in the period January-March from a year earlier after declining 12.8 percent in the fourth quarter of last year.

New home prices fell 12.8 percent, while the average price of existing homes decreased by 15.3 percent. Prices have now fallen by 39 percent from their peaks toward the end of 2007.

Prices fell across the country, with the biggest drops experienced by the regions of La Rioja (18.0 percent) and Madrid (16.8 percent.)

The government removed tax relief for homebuyers at the start of this year, further depressing demand in a market badly hit by rampant unemployment.

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