The Spanish housing ministry has officially released figures showing that property prices in Spain rose by 4.8% in 2007, down from 9.6% in 2006. However, calculating for inflation, prices rose in real terms by 0.6% in 2007.

All the separate regions of Spain tell a different story.

The top performers:
Granada region 8.5%
Murcia region 8.1%

The lowest performers:
Madrid 1.8%
Alicante 3.3%

In the final quarter of 2007 prices fell in the following regions

Extremadura -0.3%
Castellon -0.9%
Cantabria -1.9%
Cordoba -1.9%

If the government’s figures are correct, then the Spanish property market is in for a soft landing rather than a heavy crash. Experts and the government anticipate that prices will converge on the general inflation rate and allow housing affordability to return to normal levels over a period of years.

According to Kyero who are a leading property portal that publish a price index, asking prices fell by 2% in 2007. In real terms that’s an average of 245,000€.

An average 2 bed property fell by 8.3% to 245,000€
Average 4 bed properties rose by 3.8% to 357,000€
5 bed properties rose on average by 4.8% to 440,000€

Kyeros figures suggest that detached properties are holding their prices much better than apartments.

Spain is still a great place to invest or purchase, but make sure you buy the right property in the right place.