The pace of house price decline in the Spanish property market accelerated in the third quarter of 2012, but there is some way to go before the real estate bubble bursts and the market returns to normal.

This is according to the latest Eco Flash for Spain from BNP Paribas' Economy Research Department, which revealed prices were down 9.3 per cent year-on-year between July and September.

Prices have dipped by around a quarter since peaking in 2008, but BNP Paribas noted property in the country is still overvalued, a situation it expects to change once the country's government establishes a 'bad bank'.

Bloomberg recently reported that a €90 billion (£56 billion) limit has been set for the bank, which will buy up toxic assets such as unfinished developments in order to improve the balance sheets of lenders.

The bank is due to become operational before the end of the year and will have 15 years to sell back the toxic assets, with the country's finance minister stating they will be sold at their true value.

source: http://www.propertyshowrooms.com/spain/property/news/spain-property-prices-dip-q3_312452.html

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