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| Unsold new and completed properties in Spain |
| Published on 25-08-2008 | Email To Friend Print Version
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Approximately one third of the 1.8 million properties in Spain built since 2005 which are mostly residential, remain unsold.
The depression in Spanish real estate is becoming deeper and deeper, according to recent data.
The depression in Spanish real estate is becoming deeper and deeper, according to recent data.
The President of the Union of Spanish Contractors, Mr. Guillermo Chicote recently stated that the consequences for the economy of the country seem difficult to assess as the construction sector was the driving force of the country’s progress - and the success of many other sectors within the Spanish economy now appear to affected by this problem.
One third of residential properties completed since 2005 remaining unsold. The number of sales last year decreased by 60% (September 2006-2007).
As quoted by one of Spain’s leading newspapers “El Pais”, most of the unsold newly built properties are located in Castilla de la Mancha, Valencia and Murcia. However, only in the Canary Islands (for example, Tenerife) does demand remain sufficient enough to meet the offer price of new properties on the market.
Construction companies and developers are now facing this reality and have limited the number of new development projects. The decrease in demand, especially by foreigners (mostly Northern Europeans) who have previously been responsible for the boom in the holiday property market, is cited as one of the main reasons for slow down in Spanish real estate.
Property prices, quite literally, went through the roof during the period of 1997 - 2007 and the market saw a 280% increase during that period. Respectively, the percentage of loans on the total price of properties increased from 75% of available income in 1995 to 133% in 2007. Today, the picture is looking totally different with the first sign of price reductions around 3-5% appearing on figures for July 2007.
The Top Properties Team
August 2008 |
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