Existing home prices in Spain fall as much as 4.5% in Q2

Source : Business Times – 30 Jun 2009

Asking prices for existing homes in Spain dropped by as much as 4.5 per cent in the second quarter from the previous three months, Idealista.com said yesterday, as lenders granted fewer mortgages and unemployment increased.

The prices asked by sellers in Spain’s biggest cities fell on average by 1-3 per cent, Idealista said in an e-mailed statement. The biggest decline, in the cities of Cadiz and Ciudad Real, was 4.5 per cent.

House prices soared 120 per cent between 1997 and 2007 as falling interest rates, rising employment and economic growth averaging 3.8 per cent a year boosted Spaniards’ spending power. Price gains began to slow in 2007 as the global credit crisis took hold and started falling in July 2008 as overbuilding caused the supply of homes to outstrip demand.

In Madrid, prices slipped 0.6 per cent to 3,954 euros (S$8,090) per square metre (psm) and in Barcelona, Spain’s second- largest city, they fell 1.5 per cent to 4,153 euros. In Valencia, the third-biggest city, the decline was 1.9 per cent to 2,499 euros psm.