Spanish property market continues to slow

Country: Central, Other Spanish Places, Spain; Other Spanish Places, Spain; Spain

5 August 2008

The number of Spanish properties sold in May fell for the fourth consecutive month, while prices are also expected to decline further due to tighter lending conditions and low consumer confidence, according to Spain’s National Statistics Institute.

House sales sunk 34% in May 2008, compared to the corresponding month in 2007, as mortgage borrowing plunged 40.4% during the same time period. This suggests that Spanish property prices will depreciate further over the coming months.

Additionally, there are now around 1.5m new homes, which remain unsold, according to consultants Aguirre Newman, which is having a negative effect on the country’s rapidly cooling economy.

Spain’s coastal markets have been worst affected, especially areas like the Costa del Sol in southern Andalucía and neighbouring Murcia, which saw particularly heavy development in the latest construction cycle.

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