Price of new Spanish housing by region
According to the Association of Property Valuers in Spain the price of newly built houses and flats fell by 4.7% during the first quarter of 2011 compared to a fall of 2.3% recorded at the end of the last quarter of 2010.
In June the price of an average house or flat in provincial capitals was found to be 2,419 euros per square metre (m2) which means that a house or flat measuring 90 m2 now costs around 217,710 euros.
Prices fell throughout Spain but especially in Aragon (8 %), the Balearic Islands (6.8 %), Extremadura (6.6 %), Murcia (6.3 %), Cantabria (5.7 %), Andalucia (5.6 %) and La Rioja (5.5 %).
In provincial capitals the price of new housing rose slightly in Pontevedra (0.9 %) and Zamora (0.3 %) while prices remained the same in Palencia and Badajoz.
The most expensive areas were found to be Barcelona where the average price of a house or flat was found to be 3,720 euros per m2, San Sebastian (3,615 euros per m2) and the Spanish capital Madrid (3,240 per m2).
The lowest prices were recorded in Murcia (1,387 euros per m2), Badajoz (1,389 euros per m2) and Caceres (1,405 euros per m2).
The report predicts that over the next few months the surplus number of new houses and flats will be absorbed into the market given the existence of the potential demand although this also depends on the state of the economy and the availability of finance for people wanting to buy a home. The rhythm of sales will be gradual and slow and will go hand in hand with the reduction of prices by property developers.
According to the Association of Property Valuers the reactivation of the property market is closely linked to the speed at which the surplus stock of housing is absorbed – something which at present remains uncertain given the high rate of unemployment, economic uncertainty and the difficulty of obtaining a mortgage.
The report also says that the current process of restructuring the Spanish finance sector could have repercussions on the housing market because the availability of credit for buying property will be limited until the period of adaptation in the finance sector has been completed.
The Association of Property Valuers used information from more than 33,000 properties belonging to more than 2,350 property developers in 400 cities and towns throughout Spain.