We've been hearing for a while that house prices will drop and for a while they managed to hold steady but in last few months (this is going back 2 years when we first moved here) prices have started to fall alot.

Just saw this today.

3 bdrm 2 bath 110 sqm apartment in Tres Cantos

288.000 OMG!!!!!!!!!!

2 years ago that was over 450.000 euros.

It's a well known fact that in bubbles prices overshoot on the top and when they burst they overshoot on the way down. Because Spain is so massively overbuilt I expect to see it way overshoot on the way down. Most commentators expect a reasonable 25% drop, a few brave souls are saying a 50% drop for 2 bedroom holiday lets on the coast.

I'm going way out on a limb and stating that in Madrid and Barcelona you'll see a 70% or more drop in prices. House prices are down 65% in California with no bottom in sight yet, why should Spain be any different.

I should add the reason why prices are dropping so much is that Spain and the world economy is in very very bad shape. 2009 the **** will really hit the fan. I wouldn't want to be a homeowner trying to sell.

Woo Hoo! That's great news about the lower house prices. I think I'll take TWO! hehehe... I wish! When you tell me the same sized 3BR 2BA flat WITHIN Madrid's M-30 costs the same, then I'll be all ears.

Clipboard-carrying guys are coming to our building nearly daily asking if we're interested in selling our houses. I'm also getting frequent calls asking if I'd like to re-work my existing mortgage (but I don't have one!, thank god) with their company.

Saludos, MadridMan