The property market in the Barcelona region may have collapsed, with transactions down by 46% according to the property register, but property prices in the Catalan capital are still rising, at least according to a new report from Barcelona’s town hall.

New build Barcelona property prices were 11.6% higher at the end of the first quarter than a year ago, according to the town hall’s figures. Resale property prices were up by 4.6%.

Given the rapid deterioration in the economy, household budgets, and access to credit, one would expect property prices in Barcelona to be falling. Indeed, anecdotal evidence from property professionals and bank managers suggested that prices are falling, in some cases by 20% or more. But, as usual, official figures would have us believe that prices are still rising, when economic common sense suggests the opposite.

Looking at the town hall’s figures on a quarterly basis, they do at least show some sign of a slowdown in new build prices, which only rose by 0.3% between the end of 2007 and the end of March 2008. Resale prices, however, rose by 5.6% in the same period, if you believe the town hall’s figures.

In Madrid, on the other hand, official figures tell a story of small price falls, both annual and quarterly. Not only is newly built property slightly cheaper in Madrid (4,193 Euros/m2 compared to 4,939 Euros/m2 in Barcelona), but new build property prices fell by 1.9% over 12 months to the end of March. Resale property prices fell 0.5% to 3,760 Euros/m2.

Looking to the future, Barcelona’s town hall forecasts that property prices in the city will continue to soften, with “steeper and widespread price falls in 2008”.