A report by Tasaciones Inmobilarias, the property evaluation experts, has confirmed the trend in increasing house prices in Spain, mirroring what is now an established Europe-wide phenomenon. Annual inflation in the cost of property is running at an average of just over 17 per cent, with the price per square metre of new buildings going over 2,000 for the first time. Established and older property prices have also increased to roughly 1,700 per square metre. Prices vary according to zone, with Valencia and Andalusia registering an increase of 22 per cent, whereas property in the Basque country and the Canary Islands rose by a mere 12 per cent. In Madrids property prices have increased by 106.5 per cent between 2000 and 2004, this year a square metre costs around 8,500.

The Zapatero governments recently published 2005-2008 housing plan hopes to redress the balance by guaranteeing constitutional rights to decent quality, affordable housing according to Spains housing minister. The plan also involves the creation of a database of subsidised state housing (VPO) in an effort to minimize fraud and to promote a better organized and more efficient system of housing allocation.