"Slowdown" as Spain's property rises 12%
By Kevin Barnett, 23 Jan 2006
House prices in Spain rose by 12.8 percent in 2005, according to the latest official figures from the Government - who welcomed the first general slowdown in the property boom for four years.
New government figures for newbuild and resale homes showed the increase was significantly lower than in 2004, when house prices went up by 17.2 percent. Not since 2001, when house prices went up by 11.1 percent, has the average yearly increase been so comparatively low.
Figures showed that up to 31 December 2005, the average house price across the whole of Spain including all in-demand second coastal areas was EUR 1,824 per square metre
Rafael Pacheco, director general of architecture in the Spanish Ministry of Housing, said the figures were as expected and more reasonable house prices should follow in 2006
The official figures match similar reports by the Spanish Real Estate Society, which said recently prices rose by 10 percent last year, but proved the accuracy of forecasts of leading banks CAM and Caja Murcia who said they expected 12% for 2005 and are now forecasting a similar growth for 2006.
Apts from £113,000 forecast for 2006
Based on the latest figures, online specialists PropertyInSpain.Net forecast the lead price for 2006 for a typical 2-bed, 2-bath apartment in prime second home locations would be EUR 166,000 (£113,000).
Said the firm’s Terry Walker: “That is still affordable for new buyers as the mortgage interest rate remains around 3% and last year’s buyers will be delighted to learn their investment property has increased by over 12% - despite seemingly better deals from the so-called rival emergent countries.”
Hot spot for 2005 was the Valencia region which saw the highest price rise last year with 16.5 percent, followed by Galicia and Castilla-La Mancha where average increases were 15.1 percent and 14.6 percent respectively. PropertyInSpain.Net opened an affiliate office in Valencia in 2005 and plan to offer 20,000 new homes in the Costa Azahar – tipped for exceptional property growth – following sales & marketing agreements with the area’s leading developers.
Cantabria saw the lowest increase of 6.6 percent, followed by Castilla y León with 7.5 percent, then Catalonia at 8.8 percent. The most expensive place in Spain is Madrid, where average prices are EUR 2,748 per square metre. In the Basque Country the figure is 2,585, while in Catalonia it stands at EUR 2,092 and in the Balearic Islands the price was EU 2,025.
Spanish Property News