Prime residential house prices in the Spanish capital are still falling, but too badly compared to other cities around the world.

Prime residential house prices fell by 4pc in the first quarter of the year, to 6,200€/m2, according to the quarterly global house price index compiled by international property firm Knight Frank.

House prices in Madrid were relatively bouyant compared to cities like Monaco (-7.7pc) and Syndey (-9pc), but still depressed compared to London, where prices surgd 11.3pc.

Ernesto Tarazona of Knight Frank in Spain recommends that investors looking at Spain consider prime residential in Madrid as that is where “values have fallen the least.” You could argue, however, that a better investment strategy would be to look for bargains where values have fallen the most, on the coast, for example.

Last year there were house 32 sales worth 46 million Euros in the prime districts of Madrid, including  Salamanca, Justicia, El Viso  and Paseo de la Habana, according to figures from Knight Frank. The lack of newly-built prime residencies meant the market was largely made up of resales, predominantly in prime central areas, with investors taking advantage of vendors under pressure to sell due to financial difficulties or family reasons.