Official House Price Index -1.9pc in 2010

The Official House Price Index published by the National Institute of Statistics (INE) would have us believe that Spanish house prices fell a mere 1.9pc in 2010.

New build (vivienda nueva) prices fell -2.1pc, and resales (segunda mano) fell -1.6pc (see chart above).

The suggestion that Spanish property prices only fell 1.9pc last year, against a background of 20pc unemployment, tightening mortgage credit, and a monumental property glut is simply ludicrous.

These figures distort price signals from the market and put off potential buyers. We would be better off if the INE did not publish house price figures at all.

Not all official figures are so unreliable. According to figures from the Department of Housing, prices fell -3.5pc last year, and 6.5pc in real terms (after adjusting for inflation). That sounds closer to the truth, even if still too optimistic.

For what it is worth, the following table shows the index broken down by region:

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