Madrid – Home prices in Spain fell 5.9 percent last month compared with May 2010 to levels last seen in 2005, international real estate valuation firm Tinsa said Tuesday.
The "strong decline" confirms the economic slump's negative effect on Spanish families' purchasing power, the company said.
The sharpest drop in housing prices, 8.1 percent, was registered in communities on Spain's Mediterranean coast, while prices in major cities and provincial capitals fell by an average of 6.7 percent.
An increase in mortgage interest rates is one of the factors exerting downward pressure on home prices, according to Tinsa's Index of Spanish Real Estate Markets.
Tinsa also blames the elimination of the sales-tax exemption on housing purchases for people earning more than 24,000 euros ($35,000) a year - which took effect Jan. 1 - and the failure of incomes to keep pace with the cost of living.
Home sales in Spain fell 29.7 percent in April compared with the same month in 2010, according to data released last week by the National Statistics Institute, or INE.
The 24,100 transactions registered in April represent the lowest one-month total since 2007, when the INE began keeping track of housing sales.
The April statistics come two days after the release of figures showing that housing sales were down 30.4 percent in the first quarter of 2011 compared with the January-March period last year.
Spanish unemployment recently climbed above 21 percent as the country's economy struggles to emerge from the dual shock of the global recession and the bursting of a decade-long property bubble.