Worries about the health of the Spanish property market have hit shares across Europe this afternoon.

Stocks in Dublin were down almost 2% knocking almost €1.5 billion from the value of shares here.

Banking shares closed lower because of fears for the billions of euro Irish investors have tied up in Spanish properties.

Spain has had building bonanza since the mid 1990's and many property companies on the Madrid stock exchange have seen their value double over the past year.

However, there are concerns the Spanish housing sector is cooling off and in some areas the value of property is falling.

In Madrid, the unease over the housing sector was triggered by  the collapse of shares in Spanish property company Astroc, which  have lost more than 60% in less than a week, after an auditor's report raised concerns over its finances.

European stock markets were also concerned on comments on the Spanish property market by the president of French construction firm Eiffage,  Jean-Francois Roverato.

Roverato justified rejecting a takeover offer from Spanish  construction group Sacyr on the grounds that the Spanish firm's real  estate assets in its home market 'could very soon be revised down.'

In Madrid the Ibex 35, which has struck record highs in recent  weeks, closed down 2.7% this evening.