Second-hand property prices in the city of Madrid have depreciated 54% since the start of the housing crisis, according to a market report from the Madrid property second because of running out of new stock completed by the Tecnocasa index. This collapse has left the cost of the square metre in the second half of 2012 at 1,818 euros, a lot less than the maximum reached in 2006-more than 3,900 euros.
In year-to-year rates–with respect to the second semester of 2011–the price reduction of second hand flats has been 17.6%. A percentage that could reflects that the home has still not hit rock bottom yet in the city.
According to the study, location is one of the key factors in determining the evolution of prices. In this way, the areas with a higher price per square metre are Chamberi (3,264 euros/m2) and Prosperidad (2,375 euros/m2), while Villaverde (1,183 euros/m2) and Carabanchel (1,429 euros/m2) have the lowest prices.
With or without elevator or lift
The square metre of flats with elevator access starts at 2,032 euros; without elevator the average price is, 1,520.
Regarding the characteristics of a property, which also have a deciding influence, the study analyzes the availability of an elevator, the size of the home, its state of upkeep, and age.
Flats with an elevator have a higher price per square metre than those without one, the prices of which in the second semester of 2012 were at 2,032 and 1,520 euros, respectively.
Regarding the size of the home, nowadays, large flats have a higher price than small ones, with 1,904 euros/qm as opposed to 1,780 euros/sqm. “We are coming from a time in which the price of flats with less than 70 m2 was more than that of the large flats (more than 70 m2).
Since the housing and the financial crisis, the price of these two types were getting closer and closer to each other, to the point that since 2009, the prices have been similar,” explains the company in a press release.
66 euros/m2 price difference between the flats in good shape and those needing work
With regards to the maintenance of the home, comparing the sales of those that are in good shape and those that need updating, the agency signals that “there is a difference of 66 euros/m2 in favor of the homes in good shape (1,845 euros/m2) as opposed to 1,779 euros/m2 for homes in worse shape)”.
On the other hand, the age of the property is another factor that influences the sale price of a home. The study states that properties that are more than 40 years old have a price of 1,709 euros/m2 and have fallen 56.7% since the time in which they reached their maximum price.
The semiannual reports from the company have the added value of analyzing the sales process in all of its phases (from the time when a home is put on the market to the time when it is sold) and they stand out as being the most complete of the sector. What is different from other studies is that it is based on the final transaction prices. That is, the final sale prices, while other analyses only take into account the asking price or valuation.