Price of new housing in Spain falls

Prices for New Housing Drops for the first time in 15 years

The slowdown in the property market in Spain has led to a situation where house prices have fallen by 1.2% during the first 6 months of 2008. This is the first fall in prices in 15 years according to the Sociedad de Tasación which has been carrying out studies of the housing market in Spain for 25 years.

The report published by this organization which values properties and is used as a reference for what is happening in the housing sector shows that for the first semester of 2008 that prices have fallen in the capitals of 35 provinces. It also finds that prices have risen in just 11 provinces, although not above inflation, and that prices have stayed the same in 4 provinces.

According to this latest study the price of new housing in the capitals of provinces closed at the end of June at an average of 2,781 euros per square metre which is 1.2% less than the previous semester when prices rose by 1.1%. In the first semester of 2007 prices rose by 4%.

Most expensive real estate in Spain

The most expensive city to buy a flat in is still Barcelona, where a square metre costs 4,500 euros despite a 0.4% drop in prices there followed closely by San Sebastian where prices have dropped by 0.6% and a square metre costs 4,035 euros. Prices in the Spanish capital, Madrid, have fallen by 1.4% where a square metre costs 3,916 euros.

Cheapest place to buy a house in Spain
On the other hand the cheapest prices can be found in Pontevedra where a square metre costs 1,848 euros, Badajoz where a square metre costs 1,525 euros and
Lugo where a square metre costs 1,547 euros.

The Sociedad de Tasación concludes that these figures show a significant slowdown in the Spanish housing market above all in tourist areas and areas on the outskirts of cities where there is a large stock of unsold new housing.

It also points out that according to the Spanish National Institute for Statistics the number of flats started and finished from January to March has gone down compared to the same period last year.

It also concludes that the considerable slowdown in the Spanish property market is due to the difficulties in finding credit, high prices and recent rises in the Euribor.