SPANISH house prices deepened their decline in the first quarter as the value of new homes dropped for the first time during the country's sharp recession, official data showed yesterday.
Home prices fell a record 7.6 percent between January and March compared to a year earlier, marking 12 months of decline, after a 5.4 percent drop in the fourth quarter of 2008, the National Statistics Institute (INE) reported.
It was the deepest fall in INE data going back to the first quarter of 2007 as well as for Housing Ministry data.
Hammering prices were falls of around 40 percent in monthly mortgage lending and house sales as unemployment rose to 18 percent, by far the highest rate in the European Union.
Supply and demand are out of kilter with one in six people out of work and at least 600'000 new homes sitting unsold in Europe's most over-stocked property market.
Spanish house prices tripled in the 10 years to 2007 but are expected to fall at least 30 percent from their peak before a 2012 recovery, according to Spanish bank BBVA.
The price of new homes fell 2 percent year-on-year in the first quarter, their first decline on record, while existing house prices fell 12.5 percent, the INE reported.