MADRID (AP) -- Spain's ailing property market showed little sign of recovery Friday, with the latest figures showing house prices were down some 15 percent in the third quarter.
The collapse in the country's real estate market in 2008 sparked Spain's financial crisis as banks and homeowners were trapped with toxic loans and property they could not sell on. Public debt levels then rose to worrying levels as the government rushed to prop up the ailing lenders.
The Housing Price Index released Friday detailed how Spanish house prices continue to tumble due to a squeeze on credit, stalled demand and massive oversupply. The index showed prices fell by an average of 14.4 percent year-on-year in the second quarter and 15.2 percent in the third. The largest regional drop — 17.9 percent — was in central Madrid.
Spain is now battling to emerge from its second recession in three years, with unemployment soaring to over 25 percent.
The conservative government has implemented stinging austerity measures to try and right the economy. Meanwhile, Spain's government borrowing costs rose to worrying levels earlier in the year as investors grew increasingly concerned about its ability to handle its debts.
The level of debt Spain has had to take on to keep its banks afloat has already forced it into accepting a €100 billion ($130.81 billion) loan package from the other 16 European Union countries that use the euro. The funds are designed to ease the pressure on the government so it can concentrate on managing national finances and avoid a full-blown sovereign bailout.
In September, the European Central Bank offered to buy up unlimited amounts of short-term debt in countries such as Spain which are struggling with high borrowing costs — provided the country first applies to Europe's emergency bailout fund for assistance.
Spain's Prime Minister, Mariano Rajoy, has said there is currently no need to tap the financial aid program, but did not rule out accessing it at a future date.
Rajoy told Cadena SER radio Friday that Spain would seek help only if it was necessary and when it was in its best interests.
Asked if he thought the recession-hit country needed a rescue, he said: "Today, no."
On Tuesday Spain's economy ministry said €39.5 billion in bailout aid approved by European authorities had arrived to ease the plight of Spain's troubled banks. The money is expected to be distributed to the financial entities in the coming days.