It is estimated that the banks' "property stocks" include up to 200,000 homes which will eventually go on sale and further saturate the market.
Certain Spanish regions bucked the trend, including Bilbao which increased its year-on-year price by 3.4 per cent, and San Sebastián by 6.5 per cent. In the latter homeowners can demand up to 4,894 euros per square metre - the highest in Spain.
Other regions up on last year included Palma de Mallorca, which increased by 10.3 per cent, Cadiz by one per cent, León by 0.7 per cent, Oviedo by per cent and Cáceres by 0.1 per cent.
Fernando Encinar, added: “Many people thought that 2010 would be the year when prices would bottom out and there would be an upturn, but this has not been the case. The pace at which prices in most of Spain have been adjusting is proving slower than was expected and in 2011, we will once again find it is going to be a tough year for housing sales.
No official figures exist for how many expats are living in Spain or for how many are heading home. The British Embassy estimates that one million Britons live at least part of the year in Spain. Many of them choose to remain officially living in Britain for tax or pension reasons, so in the eyes of British authorities they have not officially actually left the UK.
Source: The Telegraph