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Spain’s Property Prices Continue to Fall, But How Much? - 27 April 2010

Agents and country officials are at odds at how much real estate prices have dropped in Spain over the last few months.

The National Statistics Institute announced last week that home prices fell 4.5 percent during the first quarter of this year, while emphasizing that sales were up by 18.7 percent total within the last year, and 7.2 percent alone in February from January—the largest rise in month-to-month sales since 2007, according to the index.

Experts at property companies like Kyero are skeptical of these figures, especially of how much home prices have fallen, insisting that the drops are much more drastic.

Some believe the government may be trying to brighten the dismal outlook the recession has left in its wake; Spain not only has a 20 percent unemployment rate, but also remains in danger of not being able to finance its own debt, and could experience a Greece-like crisis.

However, experts across the market agree that Spain will continue to be popular among overseas buyers this year, with A Place In The Sun naming it the best destination for investment in 2010.

Agents are reporting that Brits are already taking advantage of the oversupply and dropped prices in Costa Blanca, while wealthier investors are heading to the Mediterranean coasts, where prices have fallen the hardest—7.8 percent year-on-year, according the national index. Cities like Marbella and Mallorca—full of resorts catering to the rich and famous—are even becoming more affordable, and investors are seeing great rental potential there.

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