Demand starts to eat up supply as half of new-builds sold in Málaga in 2011

Widely reported and commented on across the Spanish and other media such as internet forums this past week, has been the confirmation by the Málaga Association of Builders & Developers (ACP) that more than 10,000 new-build units have been sold during 2011, out of what was reported to be an unsold stock in the Málaga province of some 20,000 units.

What we all have felt in the market is that of course tides turn, and when it comes to the law of supply and demand, well if you don’t build any new projects then eventually – as in the early to mid 90s – there comes again a shortage and a real demand, and off we go to a new cycle.

You might say that this is still a way off. But not really. Lead times in construction tend to be 3-5 years from initiation of a project to completion. Think about that… no new product coming to the market for 5 years. At VIVA, we have already seen double digit growth in 2011 and we’re seeing a fabulous start to the year in property sales every day.

What does happen in prime areas such as Marbella and the Costa del Sol in just five years’ time, when all our stock will have been long ago sold and everyone then competes for properties coming to the market?

And how well might today’s buyer feel at that time.