Average Spanish property prices fell by -5.4% over 12 months to the end of 2008, according to Spain’s official House Price Index, published yesterday by the National Institute of Statistics (INE).

Having declined by only -0.3% in the second quarter, and -3% in the third, the index, known in Spain as the Indice de Precios de Vivienda (IPV), suggests that price falls accelerated towards the end of the year.

According to the INE index, resale property prices fell by -10.7% in the year, whilst new build property prices rose by 0.8%.

Now, everybody knows that new build property prices fell substantially last year, everybody, that is, except for Spain’s official statisticians. This just goes to show how meaningless official housing market statistics are in Spain.

The developers were the first to contradict the INE’s figures on new build prices, and if anyone knows what prices are doing, it should be the developers. As soon as the figures were out Pedro Pérez, President of the G-14 developer’s association, said that new build prices have fallen 20% on average since mid-2007.

Average prices fell in all regions, though not at a uniform rate. Prices fell the most in Catalonia -10.3%, Madrid -8.1%, and the Basque Region -8%; it is no coincidence that these are the 3 most expensive regions for property in Spain.

The following graph gives the index broken down autonomous region (source INE)