House prices in Madrid rose by an average of 7.3 percent in 2005, just slightly down on the 2004 increase of 7.5 percent. Recently released figures from the ministry of housing reveal an overall slow down in the Spanish housing boom, with last years average increase in house prices of 13 per cent ranking as the lowest since 2001. The slowdown has been attributed to the weakening of foreign demand coupled with expectations of continued interest rate hikes by the European Central Bank in 2006. In Madrid, house prices rose most steeply in Puente de Vallecas and Villa de Allecas (up by nearly 14 percent) while the Fuencarral district saw the lowest growth, with prices increasing by less than 5 percent. Madrid property remains the most expensive in Spain, at an average 2,748 per sqm.
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