Year on year property prices in Spain still falling, latest figures show

The latest property prices figures for real estate in Spain show that prices fell by between 3.5 and 4.5% year on year in February.

The data from the Department of Housing show prices fell 3.5% in nominal terms, but in real terms average prices were down 6.5%. It means that prices have now fallen 13.1% since their peak on average. In popular holiday home locations though such as the Costa Blanca, they are down 20%.

Then figures from the Tinsa Spanish House Price Index for February give a national average price fall of 4.5%. Regionally prices are down 5.2% in large cities, 6.7% on the Mediterranean coast and only down slightly in the Balearics and Canaries at 0.8%.

This means that since the peak of the market average prices are down 27.2% on the Mediterranean coast, down 20.6% in large cities and down 17.5% in the Balearics and Canaries.

There are signs though that this year could see more people return to Spain in terms of tourism and buying houses. This could improve the rental market as well.

Monarch Airlines, one the leading carriers to Spain, is increasing its programme of flights from April due to growing customer demand.  The airline, which operates regular flights from London Gatwick and Manchester airports, has added additional flights from the UK to holiday and second home hotspots of Malaga on the Costa del Sol, Alicante on the Costa Blanca and the Balearic island of Majorca.

‘We have been astonished by the soaring demand for Monarch flights in April, which we believe is being driven by the proximity of Easter to the additional bank holiday. Bookings for April are already up 49% compared with the same time last year with demand from customers still increasing,’ said a spokesman.

Overall tourism to Spain is on the increase with car hire comparison company, carhiremarket.com, reporting that Spain was the most popular destination for 25% of Brits taking a fly drive holiday in December 2010 and January 2011 with Palma de Majorca taking pole position.

The latest Eurostat data also paints a positive picture revealing that of all 27 Eurozone states, travellers spent the largest number of nights in Spanish hotels in 2010, an increase of 6.4% on 2009 levels.

Real estate agents are also more optimistic. Ignacio Osle, sales and marketing director at Taylor Wimpey de España, believes that the British in particular are returning to the best spots in Spain.

‘Our sales figures have not once reflected the decrease in interest in property that the rest of Spain has seen.  We feel very fortunate to have selected premium locations such as these to focus our core Spanish business on,’ he said.

‘It really does mean that we have been able to get on with doing what we do well and that is building superb homes, using the best labour force and the highest quality materials that we can to do the job,’ he explained.