No less than 75% of Spain's real estate companies may be forced to close their doors in the coming years, according to a study by specialist consultancy RR. Acuña y Asociados. The warning comes amid growing signs that Spain's real estate sector is cooling down. In the first three months of this year 23,000 fewer properties were sold in the country than in the same period of 2006.

No less than 75% of Spain's real estate companies may be forced to close their doors in the coming years, according to a study by specialist consultancy RR. Acuña y Asociados. The warning comes amid growing signs that Spain's real estate sector is cooling down. In the first three months of this year 23,000 fewer properties were sold in the country than in the same period of 2006.

As the downturn in the Spanish property sector persists, more than 35% of the country's 60,000 real estate businesses will have financial difficulties next year, RR. Acuña y Asociadas said. The same firm predicted a 10% decline in property sales this year, a figure that was endorsed by the Property Registrars who reported an 11.5% slump in sales in the last 12 months. The decrease is especially marked in the residential sector, where sales were down 16%.

Interest rates are expected to increase in the next few years amid an oversupply of houses in Spain. In recent years, some 700,000 apartments have been built annually while actual demand has remained in the vicinity of 400,000. Many companies have bought land and embarked on development projects with high profit forecasts that are now unlikely to be fulfilled, the report predicted. The consultancy estimates that house prices will rise no more than 7% this year, slowing to 4% in 2008.