Price of housing in Spain falls

Price of housing fall by 4.3% in 2009

The price of housing went down by 4.3% in 2009 compared to a year earlier when house prices fell by 5.4% representing a slow down in the fall of property prices in accordance with the Housing Price Index (IPV) published by the National Institute of Statistics (INE).

The general fall in the price of private housing began in the second quarter of 2008 and reached its maximum a year later when prices plummeted by 7.7%.

In 2009 the IPV fell by 7.6% in the first quarter, 7.7% in the second quarter and by 7% in the third.

The slow down in the fall of house prices in 2009 was mainly caused by the drop of 3.5% in the price of used housing, almost five decimal points less compared to the previous quarter when prices in this sector of the housing market fell by 8.3% and nine decimal points less since the maximum fall in house prices in the first quarter of 2009.

The price of new housing fell by 5.1% which also represents the first slow down in the fall in prices for this sector of the housing market since the first quarter of 2007.

All regions of Spain experienced falls in property prices at the close of 2009 except for Extremadura where the price of housing went up by 1.9% and in Murcia where prices stayed the same. Prices rose by 3% in the city of Melilla.

Property prices fell by above the national average in Navarra (8.3%), the Basque Country (7.1%), Catalonia (7%), Aragon (6.8%), the region of Madrid (6.6%), Cantabria (6%), the Balearic Islands (5.6%) and the region of Valencia (4.9%).

In the following regions prices fell by less than the national average – La Rioja (3.1%), the Canary Islands (2.5%), Castilla y León (2.5%), Castilla-La Mancha (2.1%), Andalucia (1.7%), Galicia (1.5%) and Asturias (0.5%). Prices fell by 1.7% in the city of Ceuta.

The IPV does not include state subsidised housing (Vivienda Protegida Oficial) or variables such as the price of a square metre or the number of transactions carried out all of which are taken into account in the figures published by the Ministry of Housing.

The different references used by each organization partly explain why figures differ between the Ministry of Housing and the INE. Figures for the Ministry of Housing show that house prices fell by 6.3% in 2009 to 1,892.3 euros per square metre which is a the biggest fall in prices since records began.

In order to compile its statistics the INE collates information provided by the General Board of Notaries on deeds signed in person in its offices in the Peninsula while the Ministry of Housing bases its figures on data supplied by the Professional Association of House Valuers (ATASA).