Spain to buy land for state-subsidised housing

MADRID, July 23 (Reuters) - The Spanish government said on Wednesday it would buy 300 million euros ($478 million) worth of land for state-subsidised housing over four years but insisted the move was not to bail out ailing construction firms.

"Public money is not for saving companies in crisis," Housing Minister Beatriz Corredor told a forum in Madrid.

"We have always said the growth in the property sector was unsustainable with housing building greater than demand."

However, the minister said the government needed extra land to meet its promise to increase production of state-subsidised homes to 150,000 a year from 100,000.

The government will start a search for land to buy in October, asking companies to present plots for sale.

The land will have to be valued and the government will work with regional authorities to select which parcels should be bought and which regions have most need of extra state-subsidised homes.

Spanish construction companies are battling the end of a near-decade long housing boom which resulted in excess supply.

Many estate agents, property companies and builders are now facing financial difficulties as they struggle to sell houses and repay debt.

Property companies would have an estimated 800,000 unsold homes in their stock at the end of this year, said Corredor.

"They will take three years to use up their stock," she said.

The government has said it is prepared to buy homes from the private sector for state-subsidised housing if the property is available at the right price.

Earlier this month, the country's largest builder Martinsa Fadesa (MFAD.MC) filed for administration in the largest corporate default in Spain's history, and said it had assets and land totalling 10.8 billion euros. (Reporting by Sarah Morris; Editing by Victoria Main)