7 December 2016 – El Economista
Some of the stock of new homes that were left unsold when the real estate bubble burst and the crisis began in 2008 will have to be demolished, given that they cannot be absorbed into the market, as they do not fulfil the criteria that house buyers now look for.
That is according to the President of the Property Developers’ Association, APCE, Juan Antonio Gómez-Pintado, who, nevertheless, thinks that the market may still be able to take on some of that housing stock.
“Some of the stock may be absorbed, but in other cases, properties will have to be demolished because people prefer new developments, with environmental features, that are constructed with other materials and that are planned in a different way to how things were done ten years ago”, said the President of the Property Developers’ Association.
According to Gómez-Pintado, the stock is being sold in “certain geographic regions, but not in others” and he claims that the situation in terms of housing developments “was planned by bodies who should not be involved in planning, namely, Town Halls”.
“Autonomous regions should be the ones to plan where and how they want to grow their cities and towns”, said the President of the APCE in an interview with the College of Registrars.
According to data from Servihabitat, by the end of 2016, the stock of unsold homes left over from the beginning of the crisis will amount to around 388,000 homes, however that figure will decrease by 20% in 2017, to 315,000 units. (…).
Analysis performed by the company shows considerable variations in the distribution of these left over homes across the different regions in Spain, in such a way that there is hardly any stock left in Madrid, whereas in the Community of Valenca, there are 228 unsold new homes for every 10,000 inhabitants.
“A before and after” in the sector
During the interview, the President of the APCE highlighted the “before and after” experienced by the construction sector and house sales, which account for 6% of domestic GDP, as a result of the crisis. “The sector is trying to do this differently to how it did it in the past. The practices of the past were not widespread, but they no longer play any role at all”, he said.
Nevertheless, Gómez-Pintado considers that Spain’s real estate companies are still facing three challenges: to grow in size; to introduce changes in terms of construction; and to become more environmentally aware and energy efficient.
In terms of the evolution of the market, the main aim is for young people to be able to afford to buy their first home, given that, currently, the sector “nourishes” the so-called “demand to reposition” from those people who bought a home fifteen or twenty years ago and are now looking to upsize.
In terms of their relationship with the Public Administration, the Property Developers’ Association has just one request – a “stable legal and fiscal framework”. “We do not want PIVE plans, subsidies or aid, we just want legal certainty – clear, concise and transparent rules for everyone”, said the President of the APCE, who drew comparisons with the automobile sector to illustrate his point.
Original story: El Economista
Translation: Carmel Drake