House prices in the Spanish capital have collapsed by more than half since the onset of the crisis, making it one of the cheapest capitals in Europe for property investors interested in one of the world’s great cities.

Resale house prices in Madrid continued their relentless downward spiral in 2013, with market values down 12pc over 12 months, according to data from Tecnocasa, a franchise chain of estate agents, and one of the biggest property retail opperations in Spain.

The cost of resale property in Madrid now stands at an average of 1,615 €/m2, not far above construction costs, implying most of the land in Madrid is dirt cheap or even free.

On a cumulative basis, resale house prices in Madrid have fallen 59pc peak-to-present – one of the biggest falls in the developed world. Elsewhere in the world house prices having been rising, making Madrid now start to irresistible to property investors who want a piece of one of the world’s great capital cities.

Madrid’s house prices haven’t fallen uniformly across the board. Values are also influenced by age, condition, size and elevators. Buildings with lifts hold more value, boosting sales prices from 1,400 to 1,869 €/m2, all according to Tecnocasa.

By district (and only including areas with a Tecnocasa office), resale prices in Madrid vary from 2,643 €/m2 in Chamberí, to 984 €/m2 in Villaverde.

Before the crisis small flats of less than 70m2 commanded higher prices per m2 than larger flats, but the opposite is now true. Larger flats now cost on average 173 €/m2 more than smaller flats of 70m2 or less.