Property on the Costas now 27pct below 2007 values

 

The average prices of residential properties in Spain were 5% lower in January 2011 than they were for the same period in 2010, and have now reached 20% under their peak values of 2007, according to the latest real estate index to be published.

The report issued by TINSA reveals how the Costas, which led the property boom with purchases by foreigners, has slumped the most - with prices down 8.4% year on year and 27.2% since their peak.

The larger cities followed with average prices falling 6.5% year on year, however, the Islands weathered the storm much better, with prices falling 3.4% year on year and down 17.5% since the peak of the property market.

When combined, the average shows a fall in values of 19.6%. TINSA also concluded that the disappearance of various tax incentives as of 31 December, caused an unusual readjustment of values at the end of last year, prices are now adapting to the new market conditions.

Latest figures release by the National Statistics Institute (INE) also shows that the Balearic property market is performing better than the rest of the country, with 18.4% groeth seen when compared to the seen period last year.

A total of 9,698 properties were sold in the Balearics last year, and Estate Agents and developers on the island of Mallorca in partiular are expecting this growth trend to continue throughout the rest of 2011.

The director of the Spanish Tourist Board also recently announced how the UK holiday market to the Balearics is up 13%, confirming that Mallorca has maintained its position as one of the most popular holiday locations, whether staying in a hotel or in owned or rented accommodation. Political unrest in Egypt and Tunisa over recent weeks has only resulted in demand increasing.