Spain’s property glut will continue undermining prices for years to come argues the annual Spanish Property Market Situation report by consultants RR de Acuña & Asociados.

The report came out a few weeks ago, but as it’s an annual report I didn’t’ feel the need to treat it like breaking news. It should also be noted that RR de Acuña & Asociados are notorious pessimists, though in recent years that means they have got it right more than others.

They say the report is based on an analysis of almost 60,000 property-sector companies, 23,600 of which have gone bust owing the banking sector 137 billion Euros.

Here are the main findings of the 2010 report:

• There are around 1.5 million homes on the market, breaking down into 683,000 new builds (473,000 completed and 210,000 still under construction) and 620,000 – 720,000 resales, plus another 200,000 that belong to banks. Compare that to the Government’s estimate of 688,000 homes on the market.
• It will take the market until 2015 to absorb the current supply, and 2017 in some areas, based on current demand for 240,000 – 280,000 homes per year.
• House prices will fall on average by another 20pc over the next 5 years, taking them back to where they were in 2003/04. Prices will fall by 15pc in cities and by up to 30pc in other areas.
• 50pc of today’s stock of building land won’t be needed until after 2020.
• Based on household formation of 357,000 per year, there will be demand for 2.5 million homes in the next decade, by only 50pc, or 1.2 million will buy.
• Property companies are saddled with almost 260 billion Euros of debt, around 25% of Spanish GDP.
• 60pc of the sector will disappear, with a loss of 1 million jobs.