Sharp fall in property prices along the Costa Blanca
According to a report published this week by the property evaluators Tinsa properties along the Costa Blanca have lost up to 14.3% of their value since the beginning of 2008. It appears that this part of the Mediterranean coastline has suffered the most from the nationwide slump in the housing market and prices have fallen almost five points more than the national average.
The index for the Mercados Inmobiliarios also shows that in coastal areas have suffered the most from the problems affecting the property market in Spain although figures for the whole country were negative with falls of up to 8% in provincial capitals and larger cities, 9% in the Balearic and Canary Islands and 10% in other urban areas. Overall prices are down by 10% compared to those registered during the property boom of recent years according to the results of an economic study presented by the Organization for Cooperation and Economic Development (OCDE).
The sharp fall in the value of properties along coastal areas of Alicante comes after five years in which investing in bricks and mortar brought healthy returns. According to figures published by Tinsa in 2002 property prices rose by 21%, in 2003 by 21.6%, in 2004 by 20.7% and in 2005 and 2006 by 14%. In 2007, the first year of the crisis in the housing market, prices rose by just 5.3%. The sudden fall in the rise in the price of properties led to a slow down in the construction sector with fewer new properties being built and last year activity in the construction sector was virtually paralyzed. Construction along coastal areas has been especially affected due to the fact that many properties are destined to be second homes or for investment purposes only.
According to the OCDE activity in the property market is also slowing down in a large number of countries within the eurozone after several years of strong growth when prices in some countries rose as much as by 50% between 2002 and 2007.
Prices in the US rose by around 75% during the same period. Nevertheless, the property market in the eurozone is believed to be less vulnerable than that of the US because it is not based on high risk loans.
The price of ‘second hand’ homes in Spain was estimated to be 2,154 euros per square metre at the end of 2008 which shows a fall of 3.2% according to Hogaria.net.
Specifically, prices have fallen in Tarragona by 15.9%, in Lugo by 12%, in Alicante by 11.7%, in Ourense by 11.4% and in Álava by 9.6%. Prices rose in Murcia by 7.7%, in A Coruña by 6.9%, in Jaén by 4.9%, in Vizcaya 4.7% and in Zaragoza by 4.4%.
Provincial capitals where prices dropped the most were Ourense, which saw a fall of 16.
6%, in Palma de Mallorca prices fell by 16.3%, in Barcelona prices fell by 10,1%, in Córdoba prices fell by 8,6% and in León prices fell by 8,3%, while prices rose in Cádiz, Burgos, Salamanca, Murcia and Valencia.
The most expensive property in Spain is in Mallorca in Port d´Andratx. It is a 630 metre squared villa with five bedrooms, six bathrooms and costs 18.5 million euros. In the province of Alicante in the area of Vistahermosa there is also a 1,300 metres squared villa for sale at 10.5 million euros. Amongst other attractions the villa boasts a disco and spa.
Translated and adapted from an article in Diario Información