Housing prices show boom slowing down

1 July 2004

MADRID — The average price of new houses rose 13.8 percent in the past year, according to a report published Thursday.

The report, from the Assessment Society (Tinsa) shows an increase of five percent lower than the same period in 2003, when prices rose by 18.8 percent.

It confirms predictions of a slow-down in the housing boom, which has been widely forecast.

Tinsa said in the first half of the year, the average price per square metre of a new house was EUR 2,051.

A house or flat of 100 sqm cost on average EUR 205,000 in June, the report said.

The most expensive cities were  Barcelona ( EUR 3,098 sqm) Madrid ( EUR 3,083 sqm) and San Sebastian ( EUR 2,851 sqm).

The cheapest cities were Lugo, Badajoz and Cáceres where prices are less than EUR 1,200 sqm.

But the biggest rises were seen in Girona (19.2 percent), Toledo (18.7percent), Alicante (17.7 percent), Soria (17.5 percent), Valencia (16.5 percent), Cuenca (16 percent), Almería (15.9 percent)  and Huesca (15.5 percent).

Flat prices have gone up 6.2 percent in the first six months of this year, while in the same period in the year before, they rose 8.1 percent.

They predicted prices will rise 7.2 percent in the second half of the year.

Tinsa said the reason for the slow-down was the reduction in the price of flats in main cities.

Also in Madrid and Barcelona, analysts spoke of a bubble in demand which could be about to burst.

“The rise in the prices is moderating in the large cities like Madrid where the ‘bubble effect’ is more palpable, where in the centre the market is very mature and there are very few offers,” said Carlos González-Besada, deputy-director general of Tinsa.

[Copyright EFE with Expatica]

Subject: Spanish news