Spanish property prices stagnated during January, marking the first month without a decline in three years. Research by and IESE Business School revealed that last month the average asking price of a home was €1,890 (£1,631 approximately) per square metre, compared to €1,891 (£1,632 approximately) in December. With the market in freefall since 2008, the news will be widely welcomed, indicating a possible return to stability in the future.

While the annual decline stood at 9.9 per cent, homes in Madrid actually witnessed an increase in value, rising by 0.3 per cent to €2,965 (£2,559 approximately) per square metre.  This is 57 per cent higher than the national mean and bodes well for the Spanish capital economically. However, these figures should be viewed with cautious optimism, with the outlook for transactions failing to mirror that of property prices.

Hugo Navarro, a money manager at BPA Global Funds in Madrid, told Bloomberg: "It’s still a very illiquid market, and there aren’t many deals going forward at these prices. The real price, where sales can happen and that would be reflected in official valuations, is still about 20 to 25 percent below these levels." What's more, the Spanish government stated that it would scrap a tax rebate and raise value-added tax on new homes to ten per cent from four per cent as of January. This means that buyers will have been rushing to make purchases prior to this deadline.

Yet it seems wrong not to gain some pleasure from' latest figures and there are signs across the board improvements are taking place. In Spain's Autonomous Communities, several have experienced rises in the prices of second-hand houses. These include Murcia (one per cent), Canary Islands (0.7 per cent), Ontario (0.7 per cent), Castilla-La Mancha (0.6 per cent), and Valencia (0.1 per cent). However, Extremadura and Galicia have registered declines in the median price of resale property. Twenty-seven provinces also noted declines in monthly terms, ranging from 0.1 per cent to 1.5 per cent.



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