Slump continues

Spanish house prices have slumped by 26.3% in the period up to July this year and mortgage lending is down by 33.2% as the credit crunch continues.

The property market has been the backbone of Spanish growth for the past decade but is now on the verge of recession according to many. However, many analysts believe that the market is still overvalued by around 30%.

Next month sees the introduction of a new housing index following criticism that the current one does not accurately reflect the slump in the property market.

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