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STAFF REPORTER LAST month, Palma proved to be the regional capital of Spain which experienced the third sharpest fall in the cost of second-hand homes, with a downturn of 0.8 percent.

Figures released by the IESE Business School yesterday showed that Palma has registered a 0.3 percent fall-off over the past three months, a price variation which was only exceeded during this time frame by Granada with 1.2 percent and Leon with 0.6 percent. The Business School said that the average cost of second -and housing in Palma per square metre currently stands at 2'510 euros, 0.8 percent less than last month and down 4.1 percent on the same time last year.

Across Spain as a whole, the average price of second-hand homes fell last month by 9.8 percent to stand at 2'524 euros per square metre. The downturn has returned the level of second-hand home prices to levels registered in June 2005. Counting this decline in home prices, 16 consecutive months have now been recorded since November 2007 when there has been a fall-off in the cost of homes.

Last year, the Balearics claimed it could keep its house prices steady by not granting licenses to build further developments, unlike the mainland where some regions had major housing projects frozen because of the crash in the property market.