Spanish property developers and individuals are building very few new homes, according to recent data from Spain’s Housing Department in the Ministry of Public Works (Fomento).
Just 33,869 residential plans were approved in 2013, and 23 per cent less than in 2012, which saw construction begin on 44,162 properties.
These figures become more dramatic when compared to 2006 data: in that year no less than 865,561 properties were rubber-stamped for construction.
This 95 per cent collapse in approvals may seem like bad news for those seeking a new property in Spain, but demand from many Europeans, especially the British, has dropped off dramatically due to domestic economic pressures. The poor economic outlook in Spain also deters those seeking to start businesses in Spain.
With over 2 million unsold properties on the market, prices are attractive. But in terms of those seeking holiday or retirement homes from outside Spain, the stock available often falls short of requirements. Properties in or near popular coastal towns and cities are less numerous, and fetch higher prices.
The domestic Spanish market may need several years to clear the huge glut of houses currently for sale, and developers may need to wait a long time before they can attract the funding required to start building again.
However, with a tentative economic recovery in the offing in Europe, the fortunes of Spain’s property market could improve, and with it the number of approvals – especially for property types that are more appealing to the UK/European holiday home buyer, such as those by the sea.
Are you one of our holiday home insurance customers in Spain? Is there a sense of optimism arising? As ever, leave your thoughts below.