“It’s not a drama” if house prices fall and homes cost “what they are really worth” said today Beatriz Corredor, Spain’s Minister of Housing, who also suggested that property prices were becoming “inaccessible for the salaries” of Spaniards.

Speaking to the Telecinco TV channel, Corredor claimed that it is a good thing that house prices are falling, as it will mean more families can afford them. “House prices are adapting to reality,” said Corredor, who also explained that one of her goals is to match supply and demand.

On the other hand, Corredor said that “it would not be good news” if there was a collapse in values that “are important to family savings”, in reference to small investors who have put their savings into property.

Corredor also said that she expects Euribor to fall to “more reasonable levels” closer to the ECB’s base rate, currently 3.75%.