According to a new report from Funcas, a Savings Bank Foundation, total housing stock in Spain will fall -7% in value by the end of 2009 to €4.19 trillion, due to the poor quality of property for sale.

It is calculated that the value of Spain’s housing stock during the property boom of 1996 to 2006 rose by a factor of 3.6 as a result of prices tripling and an increase of +25% of new land being built on.

Funcas also stated that some of the property stock was too big and of poor quality which would take a while to disappear from the market and that this type of property has caused the market to become segmented into different grades of quality with the well-built selling now at reasonable prices, but the bad stock unlikely to sell at all.

There is an estimated 732,000 unsold new homes and Spain’s G-14 developers’ association has stated that now is the right time for the market to come back to life, but it will need help from the Spanish Government which has so far resisted the developers’ calls for a bailout.