House Prices Post Biggest Quarterly Drop Since 2007

In the first three months of the year, house prices fell by 6.6% compared to the previous quarter, registering their biggest quarterly decline since 2007, the year in which the National Statistics Institute began preparing this index.

Prices of second-hand housing decreased by 6.8% over the fourth quarter of 2012, while new house prices fell by 6.5%, in both cases marking their largest quarterly declines of the comparable series. Diario Sur reported that housing prices have now registered negative quarterly rates since the third quarter of 2010.

In year-on-year terms (first quarter of 2013 over the same quarter of 2012), the decline in house prices accelerated down by 14.3%, compared to the 12.8% year-on-year decline experienced in the fourth quarter of 2012. This marks 20 consecutive quarters in which housing prices have registered negative annual rates. House prices began to fall in the second quarter of 2008 (-0.3%) and since then the trend has not reversed.

Year-on-year the price of new housing deepened its decline by almost two points, falling by 12.8% compared to the first quarter of 2012, while the price of existing homes fell by 15.3% year-on-year, adding a further 1.3 points year-on-year to the fall registered in the fourth quarter of last year.

All regions recorded negative annual rates in the first quarter. The regions which registered the most pronounced price drops were La Rioja (-18%), Madrid (-16.8%) and Castilla y León (-16.6%), while the lowest were recorded for the Balearic Islands (-9.9%) and Navarra (-10.2%).

In quarterly terms, the price of housing also fell in all regions. The biggest cuts were registered in Castilla-La Mancha (-10.5%), Murcia (-9.4%) and Aragon (-8.9%), while the lowest were in the Canary Islands (-3.7%), Valencia (-3.9%), Andalucía (-5.4%) and the Balearic Islands (-5.9%).

The Housing Price Index (HPI) published by the National Statistics Institute is consistent with the requirements of Eurostat and complements the data published quarterly by the Ministry of Development. Among its objectives is to serve as a point of comparison between Member States in terms of housing prices.