Spanish property prices 'will fall as banks sell assets'

When Spanish financial institutions begin to sell-off their real estate portfolios, the price of buying a home in the nation is likely to fall.

This is the assertion of economy minister Luis de Guindos, who told state broadcaster TVE many residential properties held by the country's banks are not going to market because they are not being valued correctly, Bloomberg reported.

He added when they are put up for sale at their true worth "we'll find that the price of housing in Spain will fall more, there'll be an adjustment and it will be more available for a lot more people," the news agency quoted Mr de Guindos as saying.

The publication cited data from the Bank of Spain, which shows financial organisations in the country hold around €176 billion (£147 billion) of "troubled" Spanish real estate assets on their books.

According to the most recent figures published by Tinsa, the value of property in Spain fell by 8.1 per cent over the course of 2011.

Capitals and major cities experienced the biggest decline in prices, sliding by 9.1 per cent between December last year and the same month in 2010.