About 1.5 million residential units throughout Spain remain unfinished or unsold, in silent testament to the marked difference between the heady housing boom the country enjoyed in recent years and Spain's present reality of a burst property bubble and high unemployment.

In June, 5.4% of all loans in Spain were non-performing, up from less than 1% in 2007. The Bank of Spain reports that as much as €165 billion in loans, amounting to 37% of all Spanish credit with exposure to construction and real estate, could become a problem.

Recently, the central bank has required lenders to earmark more of their reserves for bad loans and real estate assets on their books. Savings banks that bore the brunt of the housing crisis were merged to handle their losses better.

Experts believe that even in a thriving market, it could take three years to sell all the residential units that went up during the boom.  

Source: Wall Street Journal