Spanish house hunters should wait until at least 2010 before dipping a toe in the market due to huge stocks and recession, economists polled by Reuters said.

Five Spanish and five foreign-based economists surveyed this month said prices would drop 20-50% by the end of the downturn, or 32% on average from their 2007 peak when prices stood three times higher than at the start of the boom a decade before.

Spain’s unemployment rate is around 15% as a deep recession worsens, and foreign economists emphasise the country’s economic model needs a radical overhaul to boost its competitiveness and unwind the debts that drove a decade of growth. Spain could suffer a lengthy ‘L-shaped’ recession, analysts warned.

Against this backdrop of weakness, Spain has a supply overhang estimated at one million unsold homes - three times the number of households created in Spain each year. Banks are now adding to that by releasing repossessed homes onto the market.

All 10 experts said the overhang of empty apartments and half-finished estates around Spanish towns had to be absorbed in the next two or three years before prices gained some traction.

According to Government data, prices only fell -3.2% last year, though analysts say this massively under-reports the real size of the fall. Housing Minister Beatriz Corredor said in November they may already have dropped -15%.