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Spain's BBVA bank plans €8.7m fire sale of unwanted housing stock Spain's BBVA bank plans fire sale of toxic housing stock
(about 2 hours later)
House prices continue to plummet across the Iberian peninsula, with the ratings agency Fitch predicting a further 15% decline in Portuguese house prices and Spanish banks now vowing to sell-off unwanted stock at rock-bottom prices. House prices continue to fall across the Iberian peninsula, with the ratings agency Fitch predicting a further 15% decline in Portugal and Spanish banks vowing to sell off unwanted stock at rock-bottom prices.
Spain's second-biggest bank, the BBVA, has said it will sell off €8.7m (£6.8m) of residential property on its books by the end of 2014, at whatever price is necessary to shift it. Spain's second-biggest bank, the BBVA, said it would be accelerating its sales of toxic property assets, lowering prices as necessary. It has €8.7bn (£6.8bn)of real estate on its books including building land and thousands of built and half-built residential properties.
Most of that property comes from bankrupt developers who have been unable to pay their loans since the housing market crashed four years ago, while a smaller section comes from repossessions. Most of that property is connected to developers who have been unable to repay loans since the housing market crashed four years ago. "We will adjust prices month by month to speed up sales," BBVA's chief executive, Angel Cano, said on Tuesday.
"We will adjust prices month by month to speed up sales," BBVA chief executive Angel Cano said Tuesday. "We estimate they will be sold over the next 18 to 21 months." The Sabadell bank, which has absorbed the loss-making Caja de Ahorros del Mediterráneo (CAM) savings bank, recently said it would be selling off new properties at a 38% discount. Spain's largest bank, Santander, has reportedly dropped prices by 35% to 45%. Anecdotal evidence suggests discounts of up to 68% in some previously unsold promotions on the Costa del Sol.
The Sabadell bank, which has absorbed the loss-making Caja de Ahorros del Mediterráneo (CAM) savings bank, recently said it would be selling off new properties at a 38% discount. Spain's largest bank, Santander, has dropped prices by 35% to 45%. Spanish house prices have already fallen about 25% since their peak. But many analysts are expecting another 10% fall, which would make the overall decline similar to that seen in Ireland.
Anecdotal evidence suggests discounts of up to 68% in some previously unsold promotions on the southern Costa del Sol. Experts warned that further shrinkage of Spain's economy, which is in a double-dip recession and affected by strong austerity measures, could force prices still lower.
Spanish house prices have already fallen some 25% since their peak, with many analysts expecting at least another 10% fall, to make the overall decline similar to that seen in Ireland. Fitch said it expected Portuguese prices to fall a further 15%, or 28% from their peak, because the economy would contract by about 3.7% this year.
Experts warn that further shrinkage of the Spanish economy, which is in a double-dip recession and suffering strong austerity measures, may force prices still lower. "The change in our house price expectation reflects the worsening macro-economic conditions," it said.
Fitch said it expected Portuguese prices to fall a further 15%, or 28% from their peak, because the economy would contract by about 3.7% this year. "The change in our house price expectation reflects the worsening macroeconomic conditions," it said.