Despite reassurances from D-Boom that "Spain can once again be the engine of growth for Europe," the troubled nation appears to be going from bad to worse. House prices dropped 9.7% YoY in Q4 2012, its biggest drop on record, taking the price back to 2004 levels. This price pressure merely exacerbates the Spanish banking system's delinquent loans and drives up unemployment. But Spain is not alone, Slovenia, which many have their eye on for being the next bail-in, saw house prices slide 8.8% according to IBTimes [4]. Perhaps there is a correlation between house price bubbles (cough US cough) and banking/sovereign collapse.
Growth Engine?
House prices fell at the fast pace on record in Q4 2012...
[5]
and Spanish non-performing loans are increasing at an ever-faster rate to September
[6]
as unemployment surges to all-time record highs...
[7]
Chart: Bloomberg