Falling land-prices prepare the ground for cheaper new homes
Building-land prices took another lurch down in the third quarter, reveals the Government, falling to an average of 191 €/m2, leaving land 19.7pc cheaper than the same time last year.
Prices fell the most in municipalities of more than 50,000 inhabitants, down a dramatic 31pc over just 12 months. On the other hand, in municipalities with less than 1,000 inhabitants, prices only fell 3pc.
The highest land prices were to be found in municipalities with more than 50,000 people in Madrid (942 €/m2), Malaga (638 €/m2) and Burgos (625 €/m2). The lowest prices (in municipalities with 50,000+ people) were to be found in Murica (103 €/m2), Galicia’s Orense (165 €/m2) and Toledo (191 €/m2).
Land prices fell by around 15pc (annualised) in each of the previous 2 quarters of the year, and by around 7pc in the second half of last year.
Given that the cost of land accounts for between 40 to 60pc of the cost of building a new home, falling land prices are preparing the ground for cheaper new homes in future.
Shrinking market for land
In line with prices, the market for land has also been declining since the crisis struck. There were just 4,279 land sales in Q3, 14.8pc less than a year ago, and 28.6pc less than the previous quarter.