According to the latest data from the Spanish National Institute of Statistics (INE), prices for new Spanish properties fell by -3.9% in the second quarter of the year and are now down by an annual -7.7%.

However, prices for resale property fell less in the second quarter than in the first. In the first three months of the year, prices were down -12.5% which slowed to -11.2% in the second quarter. The index also showed that areas of Spain that are popular with foreign property investors including Andalucia and Murcia are holding up well, whereas locations like Catalonia, Madrid and the Basque Country where prices increased the most have seen the largest price declines.

It is worth bearing in mind that Mark Stucklin of Spanish Property Insight believes that the official figures need to be taken with a pinch of salt as property developers believe that new-build property prices have decreased by -20% or even more.

In addition, according to figures from the Ministry of Development, residential planning approvals were down -62% to 71,683 in the first half of this year. Housing starts slumped by -60% in the second quarter of this year, compared with the same period in 2008. There were 96,472 new homes completed in the second quarter, -6.3% less than in the first quarter and -43% down on last year.