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Urban Land Prices Continue to Fall

Madrid Land plot example (1024 x 768)The average price of urban land dropped 9.3 per cent in the second quarter compared to a year earlier, but there are signs of stabilisation.

The average price for land stands at €146.4 per square in the second quarter, a 3.5 per cent increase from the first quarter, although still down from €147.9 per square meter at the end of 2013, according to Ministry of Public Works data.

The low prices are attracting buyers. A total of 5.6 million square meters was purchased in the second quarter, which is 13.9 per cent more than in second quarter of 2013. There were a total of 3,793 urban land deals in the second quarter, 14.3 per cent more than the first quarter and a slight 0.9 per cent decline from a year earlier, the Ministry reports.

Land prices were hard hit by the market collapse, with little developer interest. Banks ultimately took control of many properties. At one point prices were down 48.6 per cent from the peak of €285 a square meter, registered in 2007, the Ministry reports.

The Ministry’s data shows a wide range of prices from region to region. Average prices were up 49.3 per cent in Extremadura, but down 23.3 per cent from a year earlier in Catalonia, El Mundo reports.

In cities with populations of more than 50,000, prices were down 16.9 per cent from a year, but remain high in many cities. In Barcelona prices average €547.1 per square meter, while the price in the Balearic Islands stood at €448.8 per square meter.

The larger cities recorded a 9.9 per cent increase in the number of land transactions from a year earlier, the Ministry reports.

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