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June 3, 2016

Four months of falling of real estate prices in Spain

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The price of second-hand properties in Spain fell by 0.2% during the month of May 2016, reaching an amount of 1,537 euros / m2, according to the latest index of housing prices of online portal Idealista.

This figure represents the fourth drop in the value of real estate in Spain since the beginning of this year, and indicates that since February 2016 the total reduction in the cost of residential real estate accounted for about 4%. In January 2016 the average price per m2 was 1,597 euros, while today it is 60 euros cheaper. This decrease represents about 5,400 euros of discount in case of buying an apartment in Spain of 90 m2.

Since the moment when during the first month of this year the price of second-hand housing in Spain increased by 2.1%, with an increase registered in 13 of 17 regions, residential property recorded falls by 0, 9% in February, by 2% in March and by 0.8% in April, to which is now added a drop by 0.2% at the end of May. If we look at the data from April 2015 (1.591 euros / m2), the annual decline is by 3.4%.

Throughout the month of May, residential real estate prices in Spain rose in 5 of the 17 autonomous communities. The highest growth was recorded on the Canary Islands, where landlords require by 0.6% more for their homes and apartments than a month ago. They are followed by Murcia and the Balearic Islands, where the cost of second-hand real estate also increased by 0.6%. Moreover, in Navarra, prices rose by 0.4% and by 0.1% in Asturias. In Catalonia, however, the price of second-hand real estate has not changed. The largest decrease occurred in La Rioja (-1.8%), followed by Castilla-La Mancha (-1.4%) and Extremadura (-1%). At the same time, there are regions such as Murcia, which have maintained the downward trend in property prices in Spain in the last four months, which led to the depreciation of second-hand housing by 5.6%. In addition, keep in mind that no region has seen a steady rise in property prices since the beginning of 2016 that indicates the stabilization of the sector.

Meanwhile, Euskadi (2,540 euros / m2) remains the more expensive autonomous community of Spain to purchase a residential property. It is followed by the community of Madrid (2,352 euros / m2) and the Balearic Islands (1,886 euros / m2). On the opposite side are located Castilla La Mancha (921 euros / m2), Extremadura (933 euros / m2) and Murcia (1,022 euros / m2), which are the most economic communities that are part of Spain.

The number of Spanish provinces, which has maintained the positive trend in residential property prices during the month May, has been 17. Prices rose by 1.5% in Lugo, with the next increase in Las Palmas (0.7%), on the Balearic Islands, in Santa Cruz de Tenerife, Valladolid and Murcia (0.6% in the four cases). The biggest drop, however, was recorded in Cuenca (-2.6%), Almeria (-2.6%), Girona and Palencia (-2.2%).

The rating of the most expensive Spanish provinces remained unchanged, led by the Basque provinces of Gipuzkoa and Bizkaia, with 2,852 euros / m2 and 2,610 euros / m2, respectively. These are followed by Madrid (2,352 euros / m2) and Barcelona (2,126 euros / m2).

The province of Cuenca is the most economical to buy a house or apartment in Spain with a price of 829 euros per square meter, and a general decline in prices by 6.5% since March of this year. This is followed by Toledo (838 euros / m2) and Lleida (860 euros / m2).

In addition, in May 2016, the number of the capitals of the Spanish provinces, where second-hand properties have increased their price, was equal to 15. The most significant increase was recorded in Castellon, where expectations of owners increased by 1.3%. In Granada it was recorded an increase of 1%, while in the city of Palma de Mallorca it remained at 0.7%. In contrast, the largest decline occurred in the cities of Huelva (-2.8%), Girona (-2.7%) and Teruel (-2.1%).

Thus, San-Sebastian remains the most expensive province capital of Spain, with a price of 3,891 euros / m2 city. This is followed by Barcelona (3,488 euros / m2) and Madrid (2,863 euros / m2). Lleida, however, is the most economical province capital, with a price of 808 euros / m2, as well as Avila (1,018 euros / m2) and Castellon (1,028 euros / m2).

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