Fall in property prices in Madrid and Barcelona

Spanish real estate website Idealista has confirmed that over the last three months while two thirds of property owners who wish to sell their properties have refused to budge, prices for one out of every three properties for sale on its website in Madrid and Barcelona have been lowered by nearly 5%.

In fact official figures for the second quarter this year indicate that property prices have fallen for the first time in many years in six provinces (Valladolid, Guadalajara, Madrid, Navarra, La Rioja and Soria).

Two weeks ago, the Ministry for Housing said that the average price of a property had increased by only 1.5% in the second quarter of this year, a figure which is below the official rate of inflation. Figures taken from idealista.com are heading in the same direction. So far it has only looked at the property markets in Madrid and Barcelona. Nevertheless the analysis of around 26.000 used properties for sale on the website shows a clear tendency in both cities of property owners to lower their asking prices when trying to sell their property.

Figures for each city are very similar. The study found that 33% of property owners in Madrid lowered their asking price by 4.8% while in Barcelona 35% of lowered their prices by 5.9%.

The continuing rise of the Euríbor interest rate which last month reached 4.564% its highest rate since February 2001 together with the continuous rise in property prices which rose by more than 18% in 2003 has meant that it has taken much longer for properties to sell.

The authors of the report say that trends towards price negotiation seen in the Madrid and Barcelona property markets are applicable to the rest of the country.