New homes will drop further in price.

According to a report on Kyero, the Government claims new homes will continue to become less expensive this year and almost 65% of the excess of new housing is located in coastal areas.

The majority of the homes which will see a drop in price in the coming months will be holiday homes. And, with few exceptions, the bulk these new homes, estimated at about 800,000 euros, are located in coastal areas or are second residences.

According to a recent report on the residential sector in Spain carried out by CatalunyaCaixa, two thirds of the surplus of unsold homes are situated along the Mediterranean coast. Specifically, nearly 65% of these properties are divided between Catalonia, the Balearic Islands, Valencia, Murcia and Andalusia.

Valencia is the region with most unsold stock, holding almost 210,000 properties at the close of the third quarter of 2011, representing 25.6% of the total. Together with Andalusia (137,000 homes) and Catalonia (107,000) they represent 55.4% of the total stock. Moreover, although the availability of new homes has slowed over the past two years, there have been increases around the Valencia region, Catalonia and the Basque Country.

In fact, by province, Castellon accumulated a stock of nearly 114,000 homes, followed by Barcelona and Alicante, with about 57,000 each. A further 52,000 new properties was registered in Murcia and almost 40,000 for Valencia.