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MADRID, April 17 (Reuters) - The speed of decline in Spanish house prices more than doubled in the first three months of 2009 as property values sank to levels last seen in 2006, government data showed on Friday.
Year-on-year home prices in Spain fell 6.8 percent in the first quarter, compared with a 3.2 percent drop between October and December that marked the first fall in price data from the housing ministry since it began collecting figures in 1995.
Prices fell by 3.0 percent quarter-on-quarter.
A recent Reuters housing poll of Spanish and foreign-based economists produced an average forecast that prices would drop by 32 percent from their 2007 peak. Most analysts said they would not bottom out until at least next year.
House prices are tumbling after credit restrictions and soaring unemployment caused mortgage demand to more than halve in January, according to government data.
Spain's home market is also flooded with around 1 million empty new homes and analysts say it will take at least 3 years for demand to catch up.
Most industry experts say government data underplays price declines in the Spanish market, which saw a 39 percent fall in sales in January compared to 12 months earlier.
Spain's TINSA property valuation consultancy reported an 8.8 percent drop in 2008 house prices, saying Spain's market faces the bulk of house price losses this year and next. (Reporting by Andrew Hay; Editing by Mike Peacock)