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Spanish property prices continue to slump

Spanish property prices continue to slump

Wednesday, 2 April 2008 12:00 AM

Property prices in Spain have continued to show strong signs of deterioration over the first quarter of 2008, adding weight to the theory the boom may finally be over in the market.

According to Spanish property portal idealista.com, prices fell in 77 per cent of the municipalities analysed during the first three months of this year, compared to just 23 which saw an increase.
Key markets in Barcelona, Madrid and Valencia all saw prices dip.

For example, during the first quarter of 2008, Barcelona recorded its fourth consecutive fall in resale housing prices - with a new price decrease of 0.5 per cent.

As a result the average price per square metre in the Catalan city currently stands at ?4,746/m2 (£3,740).

Two districts in the city did see increase in prices, with the biggest rise taking place in Les Corts (up by 0.8 per cent to stand at ?5,580/m2 [£4,400]) followed by Sant Martí, where prices went up by 0.7 per cent to reach ?4,554/m2 (£3,590).

Prices remain well ahead of the ?2,000/m2 (£1,577) recorded in 2000/02 and thus the fall can be considered a correction rather than a crash.

Madrid also saw prices slide for the third consecutive quarter, but by a moderate 0.1 per cent.

Prices per square metre now stand at ?4,258/m2 (£3,560), ?57/m2 (£44) down on the city's all-time high reached in the second quarter of 2007, when the square metre reached ?4,315 (£3,400).

Given the wider falls, over a third of the districts in Madrid (eight out of 21) reported price increases, with Chamartín, Salamanca and Moncloa among the biggest risers - although none exceeded one per cent growth.

Finally, the city of Valencia in the east of the country recorded a 0.6 per cent fall in its resale housing prices. Its square-metre price now stands at ?2,831 (£2,230) - the cheapest of the major Spanish cities.

Seven of the 16 districts analysed by idealista.com in Valencia experienced price rises during the first quarter of 2008, with the largest increase taking place in Poblats Maritims, up 1.6 per cent, leaving its square metre price at ?2,359 (£1,860).