"For sale" signs are displayed on the window of a real estate agency in Madrid, Spain, October 22, 2018. REUTERS/Susana Vera

MADRID (Reuters) - There are no signs of a new property bubble in Spain and the sector is far from showing any indications of over-valuation seen before its 2008 collapse, Bank of Spain Governor Pablo Hernandez de Cos said on Wednesday.

The governor’s comments came shortly after the National Statistics Institute (INE) reported that house sales rose by 15.8 percent in October, the seventh straight month of increases. House prices have risen almost 25 percent since a return to growth at the start of 2015, INE figures show.

In the run-up to the 2008 crisis, the construction sector was worth around 12 percent of Spain’s economic output, there was a sharp growth in lending and house prices were overvalued, Hernandez de Cos said.

“Where are we today? We’re a long way from any excessive growth in credit..and the weight of construction has seen an important adjustment,” he told a banking conference in Madrid.

Spain’s economy slumped for nearly five years after a burst property bubble sent prices falling as much as 40 percent, hit the construction sector and left millions out of work.

The construction sector has shrunk considerably since the end of the last decade and now accounts for between five and six percent of economic output. Mortgage lending has also seen a sharp reduction as banks have reined in credit.

Housing prices, meanwhile, have shown some turnaround since the economy returned to growth in 2013, but remain manageable, Hernandez de Cos said.

“In the case of house values, we’ve seen prices rise quickly but we’re still a long way from where we were during the crisis,” he said.