July 10, 2020 / 5:22 PM / in a month

Spain's home prices fall year-on-year for first time since 2017

MADRID (Reuters) - Prices of existing Spanish properties fell for the first time since 2017, two of the country’s largest real estate portals said on Friday.

Homes excluding new-builds cost 1.9% less in the second quarter compared to the same period in 2019, leading web portal Fotocasa said, while real estate site Hogaria, with a portfolio of 1.5 million homes, reported a 2.4% drop.

The downward trend will probably become more pronounced in the second half of 2020, with the sharpest falls likely to be seen in secondary and rural markets, both companies said.

“But we’re not expecting huge crashes in the price of existing homes either,” said Fotocasa communications director Anais Lopez.

Fears of a second wave of coronavirus cases in the autumn may be pushing private sellers to slash prices in hope of a quick sale before Spain again becomes paralysed, Hogaria said.

Spain’s online property portals gather data for their indices by tracking changes in the asking price for a property posted on their website.

Spain - whose deep 2008 crisis was triggered by a real estate bust - is also seeing the rate of property transactions tumble and issuance of new mortgages slashed as banks withdraw consumer financing.

One of the European nations worst affected by coronavirus with more than 28,000 deaths, Spain is set for a contraction of between 9% to 11.6% in 2020, according to the Bank of Spain, which would be its worst economic performance on record.

Reporting by Clara-Laeila Laudette; Editing by Ingrid Melander and Gareth Jones

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