Price of housing in Spain has to fall a further 30% for the market to adjust as needed, according to a study by the Confederation of Spanish Savings Banks, FUNCAS. The report defends the lack of credit coming from the banks, describing the closing of the tap as ‘absolutely rational’.The study showed that there are more than a million flats for sale currently across the country, and forecast they will take three years to sell.The study was presented by José García Montalvo, an economics professor at the Pompeu Fabra university in Barcelona, who said that prices had to fall a total of between 40% and 50% since the real estate bubble burst at the end of 2007 and start of 2008. Property prices so far had only fallen between 8% and 10% he said.He also claimed that there were many ‘sub-prime’ clients in Spain, and said he had seen credits awarded to people who had no credit record obtaining 100% mortgages with monthly payments of more than 40% of their income.
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