The Spanish National Institute for Statistics (INE) has published figures this week which demonstrate that the market for new housing in Spain is deflating significantly. The negative tendency for this sector of the Spanish property market was further underlined yesterday by the Society of Property Valuers. According to the latest research by this organization the price of newly built houses and flats has fallen by up to 9.8% in some parts of Spain in the space of one year (June 2008 to June 2009).

This means that the average price of newly built houses and flats in provincial capitals is now 2,589 euros per square metre (m2). This fall of 9.7 decimal points is higher than the fall of 0.1% in prices registered between June 2007 and June 2008.que However, the fall in prices compared to the end of 2008 is 4.5% which is less than the fall in prices registered in the last quarter of 2008 when prices fell by 5.5%.

The Society of Property Valuers predicts that prices will probably maintain the tendency to fall although exactly how much will depend on the financial pressures that constructors and property developers experience, as well as the difficulties faced by people face seeking to obtain credit for purchasing property.

Cheapest housing in Spain

The value of newly built properties went down in all provincial capitals in Spain during the last 12 months.

The most expensive provincial capitals at the end of the first quarter of 2009 were Barcelona (4,041 euros per m2), followed by San Sebastián (3,822 euros per m2) and Madrid (3,405 euros per m2), with falls of 4.8%, 2.5% and 6.9%, respectively.

On the other hand, the lowest property prices can be found in Pontevedra (1,387 euros per m2), Badajoz (1,445 euros per m2) and Lugo (1,481 euros per m2).