Fears of a Spanish property crash have increased, prompting a sell-off in real estate shares and fanning concerns that thousands of Britons will lose money.
Holiday home and investment property sales drove the boom
The sell-off was triggered by worries of rising bad debts and speculation that one large company had been buying its own properties to keep prices high.
Spain is one of the main destinations for Britons looking to move abroad or buy a holiday home as an investment.
Analysts warned that a crash could spread to the wider Spanish economy
Spain's economy has been growing strongly in recent years - the government recently raised its forecast for this year to 3.5% - driven mainly by expansion in the construction industry.
Coupled to this has been strong demand for housing helped by the low interest rates that have also underpinned consumer spending and allowed households to take on increasingly large amounts of debt.
However, in recent months cracks have started to appear and mortgage demand has slowed as homeownership levels topped 85%.
On top of that, households now have some of the highest debt levels in the eurozone, much of which is based on variable lending rates leaving consumers open to sudden increases in borrowing costs.
The worry is that should the suspected property bubble burst, and some analysts estimate that house prices are overvalued by 30%, then many other industries such as banking and retail would also suffer.
Spain's government and construction industry figures tried to calm fears on Wednesday, stating that the fundamentals of the property market remained solid.
Economy Minister Pedro Solbes said that the country was not in a "worrying situation".
He argued that the outlook for household earnings, and as a result their debt repayments, was steady because there "are good prospects for employment".
The chairman of Astroc, the Spanish property firm at the heart of the recent market wobbles, has also said that the fears are unfounded.
Analysts are asking how high the building industry can go
There had been reports that Enrique Banuelos, the chairman and majority shareholder of Astroc, had bought properties from the company and rumours that a large shareholder had sold out.
However, Mr Banuelos said that there was no "determining reason" for the sell off that has wiped more than 60% off the value of the company in the past six days.
Analysts warned that while the current fears of a crash may be over amplified, the Spanish property boom that had provided strong returns for the past eight years was probably over.
"The country is over-housed, households are over-indebted and the construction industry continues to churn out houses," said Lombard Street analysts in a note to clients.
According to Lombard Street, the biggest problem facing the market was over-supply of housing. Industry estimates show that more than 800,000 new homes were built in Spain last year, four times the number in the UK.
"That is not good news for UK investors in Spain," said Diana Choyleva of Lombard Street.
"We have had over-investment on a gigantic scale and it has already started a slowdown in house price growth," she explained.
"We will definitely see house price growth stop and falls in nominal prices are likely in Spain over the next 12 to 18 months."