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Spanish prices slow

Fears about the instability of the Spanish property market are misplaced, say industry insiders.

Though a hasty drop in share prices for property company Astroc led to widespread selling of equities, this remained a problem peculiar to that particular company and does not indicate market vulnerability, according to Liam Halligan, economics editor of the Sunday Telegraph.

Furthermore, disquiet over recent figures of Spanish house prices would be misplaced; a rise of 7.2 per cent in the first quarter of 2007 was indeed the slowest increase in years, but this would indicate a stable market, rather than an economy struggling to support unrealistic growth patterns.

Miguel Fernandez Ordonez, governor of the Bank of Spain, confirmed that fluctuations in the market were merely that and not indicative of an imminent crash.

The Sunday Telegraph reports Mr Fernandez Ordonez claiming: "You know what the stock market is like. It's calm one day, goes up the next, goes down the day after that. It's not always grounded in reality."

The revelation that the Astroc price drop was partially due to the sale of assets to its own chairman – with the allegation of falsely boosting prices – confirms the sentiments of Mr Fernandez Ordonez.

Nearly a third of overseas properties bought by UK investors were in Spain, a recent Association of Property Professionals survey revealed.

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