The Spanish property market prices may have dropped low enough in order to encourage investors and home buyers to keep an eye on the Spanish market. However, what is certain is that the price fall is not good enough for several institutions, including the European Commission. A striking statement from the European Commission last week stated that property prices in Spain rose by 155% during the property boom, whereas its fall hardly reached 22% during the property crash.
Compared to similar cases in the Eurozone, Ireland grew by 172% and then fell at a rate of 38%. In the case of Malta, prices rose by 157% and have fallen by 11% in the current crisis.
Property is getting cheaper and cheaper
Prices keep falling and falling. According to TINSA, the Spanish property market value has dropped by 7.4% from January to September 2011, compared with the same period in 2010.
Surprisingly, in 2011, property prices in main cities experienced a major fall in Spain (8.9%), which was even higher than on the Mediterranean coast (8.2%).
Summarising, according to TINSA, property prices have fallen an average of 24.1% since its peak in December 2007. Here are other examples: Mediterranean coast (31.9%), main cities (26%), cities with suburbs (25.4%), Canary Islands and Balearic Islands (20.7%) and the rest of the small cities and towns (19.8%).
During the property boom, prices climbed to very high records in the mood of optimism and credit expansion. During the first four months of 2011, property crisis prices dropped steadily to reach an average fall of 24%.
The Spanish Brick explained in a recent article why prices will keep falling up until September 2011. Unfortunately, it seems that prices will drop furthermore for several months (probably years), in order to reactivate the market. Obviously, we do not expect prices to drop by 155%.