Spanish property officially the third cheapest in Europe


Spain has the 51 st lowest house prices in Europe, according to Knight Frank.

The firm's global house price index, which tracks changing property values across the world, saw Brazil perform the strongest, with prices surging by 18.4 per cent in the last 12 months. Austria, Turkey and Russia also made the top five, with price rises of 11 per cent, 10.5 per cent and 9.9 per cent respectively.

But recession-hit Spain fared far worse. The price of homes in Spain fell by 8.3 per cent compared to 2011, a bigger drop than Italy, Portugal and Cyprus. The only three countries to see house prices ranked lower? Greece, Hungary and Ireland.

Irish property posted the biggest plummet in prices, with values crashing by 14.4 per cent since last year. But, as Spanish Property Insight reminds investors, Spanish data is suspected of overvaluing its property, meaning that property in Spain could actually be even more affordable.

The rankings follow figures from Global Property Guide, which also confirm that Europe's property markets are "sinking deeper".

The site's latest survey of global property prices in the second quarter of 2012 paints a worsening picture for many markets, as values continue to drop. Ireland, Spain, Greece, Portugal and the Netherlands all saw "alarming price falls" compared to the second quarter of 2011, reports Global Property Guide, with each market's values down by over 10 per cent after inflation. Poland and Cyprus may soon slip into the abyss too, warns the survey.

In the worst-affected European countries, house price declines were significantly greater this year, than during the same period last year. House prices fell in 15 of the 22 European countries for which house price data is available.

20 housing markets performed more poorly year-on-year in Q2 2012 than in the same period last year, while 19 countries performed better, again in inflation-adjusted terms.

Of the 39 countries for which quarterly house price figures are available, house prices fell in 25 countries, rose in only 13, while one country (the US) posted mixed signals during the year ending in the second quarter of 2012

Ireland was again the world's weakest housing market. Its residential property index plunged 16.85% year-on-year in Q2 2012, and fell by 2.91% in the latest quarter. Transaction volumes were low, and mortgage lending weak.

The next eight weakest housing markets in the world were all in Europe, including Spain (-13.18%)

With the release of both reports, the fall in the Spanish property market is in no doubt. The question is: will the bargain prices be enough to bring more overseas buyers back to its sun-soaked coastal property?