According to the Housing Price Index, this downward spiral is the result of a tight squeeze on credit, stalled demand and oversupply. Spain is also currently battling to come out of its second recession in three years, with unemployment increasing to over 25 per cent.
The largest property price fall was noted in central Madrid, where levels dropped by 17.9 per cent. Annual variation of new housing was recorded eight tenths lower than in Q2, standing at -13.6 per cent. Second-hand housing decreased seven tenths and went from 15.7 per cent in Q1 2012 to -16.4 per cent in the third quarter. The general index and type of housing were also registered at their lowest annual rate since 2007.
Annually, variation was negative in all Autonomous Communities in the penultimate quarter. The greatest decreases in variation were in Principado de Asturias (-17.5 per cent) and Galicia (-15.3 per cent, which witnessed decreases of 3.2 and 2.6 points respectively. The highest increases were in Illes Balears (one point), Andalucia (0.3 points) and Pais Vasco (0.3 points), giving them standing annual variations of -14 per cent, -12.8 per cent and -15.3 per cent respectively.
Quarterly variation was also negative, with the largest decreases once again noted in Galicia, followed by Cataluna and Communidad de Madrid. Galicia registered a fall of 5.1 per cent, while Cataluna and Comunidad de Madrid recorded variations of -5 per cent respectively. Conversely, Comunidad Foral de Navarra (1.5 per cent), Illes Balears (1.5 per cent) and Region de Murcia (1.6 per cent) noted the lowest decreases.