Monday, December 03, 2007

House prices slump further

The prices of houses in Spain fell by a further 0.68% in November bringing the average price down to 2,476 euros per square metre. This is the fifth consecutive month that the price of resale houses has dropped in Spain.

Asturias and Extremadura registered the largest decreases at 6.66% and 4.81% respectively. Aragón, Murcia and Cantabria all registered more than 1% drops in prices.

Even in Madrid and Barcelona recorded price drops of 0.30%. However, the price per square metre of houses in Madrid remains at over 4,000 euros.

Some areas saw an increase in prices during November including; Navarrese - 1.76%, Galicia - 1.21% and Castilla and Leon at 0.76%. Over the year, in Salamanca the prices have increased by an incredible 20.10%, in Ceuta by 14.60%, Cordova by 13.07%, Huesca by12.93% and Zamora by11,44%.

So it is great news for those who are buying but not so good for anybody trying to sell especially if they are looking to buy where prices are stable or on the increase.

Latest reports from the UK predict that house prices there will plummet by 10% in the next year. That will be the largest drop in prices since records began in 1969 and will put thousands of people into negative equity.

The problem in the UK has been caused by five Bank of England interest rises and the problems that the banking sector is experiencing. The credit squeeze has made borrowing more difficult which in turn has pushed down house prices.

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