House prices in Spain

House prices comparable to those recorded in 2005

Official statistics show that the price of housing keeps on falling. The latest figures published by the Ministry of Housing confirm this downward trend. They show that in the first quarter of 2010 a square metre cost 1,865.7 euros which is 4.7% less than in the same period last year.

While this figure is far from the 8% fall in prices recorded in 2009 it demonstrates that there is still room for property prices to fall further. Moreover prices today are comparable to those recorded in 2005. The figures published by the Ministry of Housing refer to the price of private housing. In contrast the price of state subsidised housing (VPO) rose by 1.9% to 1,133.4 euros per m2 last year.

However, in a dozen provinces – Teruel, Cantabria, León, Palencia, Salamanca, Soria, Zamora, Albacete, Cuenca, Cáceres, Ourense and Melilla – prices have risen compared to a year ago. In these areas of the country the surplus stock of housing has started to go down.

Nevertheless the head of the department of Arquitecture and Housing policy, Anunciación Romero, said that this did not mean that the crisis in the housing sector was at an end.

Looking at figures on a quarterly basis reinforces the idea that the housing crisis is far from over. Between January and March prices fell 1.4% compared to the two previous quarters which breaks the tendency for prices to fall at a slower rate. In fact professionals working in the housing sector believe that today’s figures are inflated and that prices have fallen by as much as 20% since the crash in the housing market.