THE Bank of Spain has predicted that house prices will continue to fall for the next two years.
According to official figures, house prices have fallen by an average of 15.4 per cent since the first quarter of 2008, which is a staggering 20 per cent after inflation.
But now, bank boss Jose Luis Malo de Molina has predicted prices could actually fall a total of 30 per cent in real terms before they start to bottom out at the end of next year.
“The correction in prices has still to run its course,” he said.
The property market is continuing to struggle with the over-supply of houses built up during a massive boom that turned to bust at the start of 2008.
“There are between 800,000 and 1.1 million unsold properties, which continue to exert pressure on prices,” added Malo de Molina. “We must draw lessons from this so it doesn’t recur.”