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Property market changes (July 2008)

Since we first arrived two years ago, property prices in Barcelona and surrounding areas has slumped, meaning there are more properties at what you would describe as fair value.

Although the shake out is still hitting the property markets and there are still sellers trying to sell at the same prices as a year ago, the reality is that there is a complete collapse in prices in the property market here in Barcelona and in Girona/Costa Brava and south to Tarragona.

As ever, the reality of a property market is that when prices are high, people will put properties on to estate agent lists just to see what price they might get, but these speculative sellers have disappeared from the market, leaving a hardcore of people who really do want to sell.

This, combined with the slump in the property and construction industries in Spain means that prices have dropped between 20 and 25% on some properties. To illustrate the impact of this, a fair sized 3 bed room apartment which might have been selling last year at around €350,000, this year could be available for €280,000 - much more reasonable, but we're probably still in a declining market if the truth be known as there was such a lot of speculative pressure on prices here.

Already a number of large construction firms have gone bust. Levels of property sales are reported to have dropped to 20-30% of the year previously and both inflation and unemployment are rising. The result is a flood of properties from desperate developers, and curiously enough, rising rental prices as more people look to rent and owners look to cover inflation.

If you want more trend information then idealista (www.idealista.com) has property price reports or look at http://www.expocasa.com. These tend to report the average price changes which is often less dramatic than some of the fire sale bargains that might be around.

Obviously you would try to avoid buying in a falling market, but if you do have to move out here, then you may find property prices are becoming more reasonable and more interesting.

 


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