Prices for Spanish property in September has fallen again giving an average 10% drop across the country, with variations along some parts of the Mediterranean coastline.

Statistics from an official Spanish price tracking model, the IMIE index, shows that property prices have fallen from September 2008 to September 2009 by over 10%.

According to estate agents in Spain, it is currently possible, in September 2009, to negotiate up to 70% discounts on 2006 quoted prices.  Other commentators are quoting that popular resorts along the Mediterranean have fallen between 30% and 50% from their peak in 2006.

Data from the official Spanish price tracking model, the IMIE index, shows that property prices rose from September 2002 by 15-20% per year until September 2006 then started to decline to a lower 5% increase in 2007, then -5% in 2008 then -10% in 2009 Thats the official figures.

However my own experience and probably that of many others, was of buying in 2004 at €175,000 rising to €220,000 by 2006 then selling for €100,000 in 2009.  That's a 50% plus fall.  The IMIE is a valuation index not market price.  So sellers be warned the market is still desperate with very few buyers.

2009 has seen the desperate flight of those on fixed incomes from the UK who have had to return home and many from Ireland who have lost their jobs in a massive surge in unemployment there, having to sell or mothball property.  Thus many sellers are being forced to sell to get something out of their property or in a lot of cases with negative equity simply walking away.  This has led to many banks repossessing property but holding onto it to see if the market returns slightly.

The Spanish banks will probably try to offload many of those properties to take a loss in 2009 to try to make 2010 look better on their risk portfolio.  So expect a further drop in price when those cheap properties hit the auction market in 2010.

The French, German, Japanese and Sweden are the first to officially get out of recession. I spoke to a senior economist, and apparently the UK should rise above negative growth in the last quarter of 2009 taking it out of recession.  However the Spanish economy has a €50bn deficit and the prime minister has admitted that unemployment will reach 20% by the end of 2010, double that of Ireland and four times the UK rate.  He stated "Signs that the deterioration is slowing does not mean that a recovery is here or will be fast There are signs that the worst of the recession has passed, but we are still suffering an intense crisis".

So the bad news for those having to sell their property in Spain in September 2009 is that prices are still down and by more than official statistics for distressed sales.