Housing prices accumulate a fall of 37% since 2007.

Housing prices accumulate a descent of 36,9% since the highest levels reached at the end of 2007, according to the figures published today by the Valuation Society. Between January and June 2007, the set-back was of 5%.

In this last year, housing prices have suffered a descent of 8%, 2,5 points higher than the one suffered in the same period of 2012. San Sebastián, (3484 Euros/m2) is again the capital with the most expensive square meter, leaving Barcelona (3259 Euros /m2) and Madrid (2805 Euros/m2) behind, while Badajoz is the cheapest city to buy a property (1183 Euros/m2).

Therefore, average prices for free properties in capitals reaches 2101 Euros/m2, which means 189.180 Euros for an average flat of 90 square meters. As for autonomous regions, all of them have registered descents in the first six months of 2013, with stronger descents in Extremadura (7,3%), La Rioja (6%) and Madrid (5,9%), while in Asturias and Murcia the descent in prices has been lower, 1,4% and 2,3%, respectively.

According to the Journal of the Market of New Properties, in the first semester of 2013 there has been no significant evolution in the absorption of the stock of new properties on sale, due to the difficult economic situation and the limitations on credit. The Society reminds that the volume of properties started and finished during the first quarter of 2013 has reached 6% in the first case and 50% in the second case, in reference to the same period in 2012, which means there has been a deceleration in the execution of construction sites when compared with the previous year.

The demand continues to show a very high retraction, which cannot be mitigated by the continuous reduction of prices, the Society adds. In its opinion, the difficulties in finding financing and the contradicting messages on the economic forecasts do not allow a favorable scenario for a reactivation in the short and medium terms.

Any possibility of reactivation depends on the speed of the current absorption, very uncertain due to the contraction of the demand, the maintenance of very high unemployment rates and the lack of trust of the population.

Source: Expansion