Spain has not been immune to the recent economic problems in the world and this has had an effect on property prices. In July 2011 it was estimated that prices were at their lowest level since 2007 and official reports show a drop of almost 30% in prices in some areas. It is considered that now is a good time to invest, with some banks offering mortgages of up to 107% for properties in up and coming areas.

Bargains are available in other areas as developers are being forced to sell at prices much lower than originally planned in order to meet their own financial commitments. It is expected that the drop in house prices will slow down in the second half of 2011 as more buyers are tempted by the deals available.

In the north-west region of Spain buyers can take advantage of some of the lowest house prices in the country. The areas which border Portugal are in particular very cheap and the average per square metre (estimated December 2010) was €1100. The coastal areas of the north-west have average prices for new build properties at €1900 per square metre. In the northern part of Spain new builds in the Basque region attract an average house price of €2806 per square metre although older properties are slightly less at €2606 per square metre. However, prices in the largest city in the region, Bilbao, are much higher at €3372 per square metre. Away from the city and coastal areas, inland properties are much cheaper. The areas around Burgos and La Rioja have an average in the region of €1500 per square metre.

The north-eastern region of Spain is home to cities such as Barcelona and Gerona and these have some of the highest average prices in the area. In some parts of the region house prices are averaging at more than €4000 per square metre, although areas which are away from the coast and in the south of the region have average prices of around half that amount. The central area of Spain is home to Madrid but the average house prices are lower than you might expect. This does depend on the district you are in though, for example, the district of Salamanca has average house prices of €5179 per square metre and the further away you are from the city centre the cheaper the prices get. Areas such as Caceres and Badajoz, which are away from the city, have average house prices of just over €1000 per square metre for a new build property and even less for an older building. The lowest average price in the area can be found in the central region at Cuenca, with new build averages at €997 per square metre and €964 for older homes.

In the south-west of Spain there are many property bargains to be found. In Malaga the average cost of a new build property is €1900 per square metre, although in Seville and Cadiz prices are higher at just over €3000 per square metre. Areas such as Badajoz have a low average price at around €950 per square metre. The south-east of Spain has a very low average price with older buildings selling for around €1000 per square metre, although in Alicante and Almeria prices are higher. The region’s highest average price is in the popular holiday resort of Benidorm at €2849 per square metre.

There are many expats who want to buy in the Spanish islands and as with the other areas of Spain, prices there fluctuate. The highest prices in the Balearics are in Ibiza due to the popularity of the island. The average cost of a property there per square metre is in the region of €2930. The Canary Islands are much cheaper than the Balearics and property on Tenerife – both older homes and new builds – averages at less than €1500 per square metre. The smaller Canary Islands have higher average prices as these are seen as more exclusive places to live.

It is not usual for expats to be charged more by locals but there are numerous tales of housing developments in Spain which have gone wrong in some way and which have ended up costing the buyer more than they bargained for. With this in mind it is a good idea to have legal advice every step of the way.