Urban Land Prices Hit New Lows

According to the latest data released by the Spanish Ministry of Development, the first quarter of 2013 has registered never-before-seen prices for urban land, with the average price per square metre standing at 157.2 euros, and the number of transactions for urban land totalling just 2,801.

The new price per square metre of 157.2 euros, represents a drop of 11.5% year-on-year (in 2012 it was 177.6 euros) and a drop of 16.1% quarter-on-quarter (compared to 187.4 euros in the last quarter of 2012), and leaves behind the favourable results recorded in the end of last year, when land values rose for the first time since 2007.

Furthermore, this is the lowest price per square metre to be recorded in the historical series of statistics, which began in 2004, where the previous minimum square metre value of 168.4 euros was registered in the third quarter of 2012, and both figures are far from the statistical peak registered in the third quarter of 2007, of 285 euros. Thus the depreciation accumulated since the beginning of the crisis now stands at 44.9%.

By region, the biggest drop was registered in Cantabria, which fell by 55.1% year-on-year, leaving the square metre price for urban land at 65.7 euros. Navarra was next, falling by 44.2%, to 123.4 euros per square metre. In Madrid, the price dropped a further 15.1%, bringing the average cost per square metre to 320.1 euros. In contrast, two regions registered increases: Extremadura, which rose by 19.9% to stand at 107.9 euros per square metre, and the Balearic Islands, with an increase of 2.4% to 225.8 euros per square metre.

With regard to municipality size, the heaviest depreciation occurred in the smallest, those with up to 1,000 inhabitants, where the price of land dropped by 57.5% last year. At the other end, the more moderate cuts were recorded in the towns of between 10,000 and 50,000 inhabitants, dropping by 5.6%, year-on-year. The cities of over 50,000 inhabitants seem more resilient to the crisis as, despite urban land prices suffering a decline of 20.1% (to an average of 298.4 euros per square metre), these cities continue to have the most sought-after plots.

The highest prices were recorded in the municipalities of over 50,000 inhabitants in the provinces of Barcelona (€569.0/m2), Zaragoza (€485.0/m2), Madrid (€454.2/m2) and the Balearic Islands (€396.6/m2). The lowest average prices within the municipalities of over 50,000 inhabitants, were in the provinces of Cádiz (€100.4/m2), Santa Cruz de Tenerife (€104.9/m2) and Palencia (€164.2/m2).

The number of transactions registered in the first quarter of 2013 was 2,801, which was 27.1% less than those registered in the fourth quarter of 2012 (3,843), and 22.2% lower than those carried out in the first quarter of 2012, (3,598).