Signs of slowdown as house prices climb 3.9pc

31 January 2005

MADRID – House prices rose 3.9 percent in the third quarter of last year, showing an apparent slowdown in the market.

Between July and September, new houses went up by less than the previous three months, when prices rose by 4.46 percent.

The Spanish Property Register said second-hand homes rose in price more, on average by 4.37 percent, compared with 3.29 percent for new flats.

In the previous nine months, the average price of all homes had gone up by 12.2 percent to reach EUR 1,525 per square metre (psqm).

But the price of new homes in the same period rose by 10.92 percent making the average price psqm EUR 1,590.

More than half the property sales involved second hand homes during the third quarter of the year.

Madrid was the most expensive place in Spain with the average price psqm at EUR 2,545, followed by the Basque Country (EUR 2,431 psqm) then Catalonia (EUR 2,109 psqm).

The cheapest parts of the country were Extremadura (EUR 713 psqm), Castilla-La-Mancha (EUR 839 psqm) and Galicia (EUR 928psqm).

In terms of buying homes to rent, there is high return on rental property, with profits rising on average 15. 6 percent last year last year.

But this did mean profits were slowing down compared with the year before, 2003, when they went up on average by 18.18 percent.

[Copyright EFE with Expatica]

Subject: Spanish news