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Construction activity in Spain tailed off between 2007 and 2014, but permit approvals are on the up once more.
Figures released by Spain’s Ministry of Development have given the country’s construction industry a boost this week and increased confidence among the real estate sector that the recovery witnessed so far in 2015 is set to continue for years to come.
The data pertains to the number of building licences issued permitting the construction of new homes. In the first seven months of 2015, some 28,870 such licences have been permitted – a massive 27% increase on 2014, and the highest such figure for four years…
Despite Spain’s glut of unsold properties, demand for new homes in desirable locations is increasing, particularly in the strongholds of Madrid, Barcelona, Valencia and the Costa del Sol, where domestic buyers are finding it easier to secure favourable mortgages.
The data shows that – March aside – every month between January and July saw an increase in property licences issued compared to the previous month, with 2015 on course to easily surpass the 34,873 licences issued in 2014.
In July alone, 5,198 licences for new residential homes were granted – the highest single monthly figure since December 2011, and a number that August is likely to easily surpass once the final data is in.
Since 2006, construction activity in Spain has been severely diminished, as evidenced by the number of permits issued in September that year alone – a massive, and evidently unsustainable, 126,000. However, this was undoubtedly the peak of the previous property boom, with experts stating that a more normal level of sustainable activity is 20,000 new licences a month.
Spain is still some way away from reaching that benchmark, but the numbers are moving in the right direction as the job market stabilises, the economy improves, lending increases and more and more young Spaniards feel secure enough about their futures to invest in the commitment of owning a property.
Vlaams-Nederlands
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Ian CloverOctober 13, 2015 at 5:52 pm
Hi Ulf,
It is hard to say for sure exactly what will happen to Spain’s unsold properties, but analysts reckon that as many as 120,000 to 150,000 nationally will be sold next year, so they will all likely be purchased over time. The problem is not so acute on the Costa del Sol as in other regions because demand is stronger here than elsewhere.
However, the news that licences are being issued in greater numbers once more is a positive step and shows that there is demand in many regions for new homes to be built – many of which will be in the Costa del Sol.
UlfOctober 7, 2015 at 11:50 am
Well, what is going to happen with all these empty complexes covering Costa del Sol? Is there a lack of interest in investing in these from the public? If the situation will remain like this, are there any plans from the authorities to tear them down? Because as it looks right now, gaping empty apartments don´t look particularly inviting to families and investors, planning to establish themselves in Costa del Sol
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