9 February 2015 – Expansión
The over-supply of properties is decreasing / The number of unsold new homes will decrease from 662,761 in 2014 to 469,700 in 2015.
The puncture in the paroxysm of greed that was the real estate bubble, left a never-ending mummified trail, a sea of properties strewn haphazardly across the country and without exception. In 2008, when the economy crashed, a squirrel could have crossed Spain from Tarifa to Cadaqués jumping from empty home to empty home. Not anymore. Or not through so many empty new homes at least. The stock of new residential property for sale is decreasing significantly, although in absolute terms the number is still high.
That is the view of the 21st Edition of the Real Estate Heart Rate Monitor (XXI edición del Pulsímetro Inmobiliario) published by the Institute of Business Practices (el Instituto de Práctica Empresarial or IPE). The surplus of homes declined in 2014, for the fourth consecutive year, from 777,000 in 2013 to 662,761. In other words, by approx. 115,000 homes or 14.7% of the total.
Furthermore, the decrease will be even greater in 2015. According to the IPE’s forecasts, the figure will drop down to 469,708 residential properties this year, i.e. 29.7% fewer than in 2014. In other words, almost one third of the stock will have vanished in just 12 months. As many as 193,000 homes.
The over-supply of homes reached its peak in 2010, when the developments that had been started in 2008 were completed – residential construction is a process that tends to take around two years. In 2010, the surplus stock amounted to 931,615 homes, slightly less than twice the number of new, empty homes that will be on the market in 10 months time in Spain (note, stock does not include second-hand homes).
Once again in 2014, Valencia was the autonomous region with the highest number of phantom residential properties and the only one to have more than 100,000. This region, which is heavily influenced by coastal second homes, closed 2014 with a stock of 163,098 units, which will decrease by 27.5% in 2015, down to 118,196, according to the forecasts released by MAR Real Estate and the IPE. Valencia accounts for no less than one in four of all surplus properties, i.e. 25% of the total.
It is followed by Castilla-La Mancha, an unequivocal symbol of the legacy of the years of over-heating, which is expected to have 72,944 homes by December (2015), down 13.6% from a year earlier.
The third autonomous region is Andalucía, which is expected to have 59,563 empty homes by the end of the year, i.e. 41% fewer than in 2014 – not for nothing, the Costa del Sol is beginning to recover. These three regions alone account for 54% of the total stock.
Experts predict that the highest reductions in the over-supply of property will take place in the Community of Madrid and Cataluña, where they expect the figures to decrease by half, i.e. from 27,618 to 13,809 in the case of the former; and from 25,353 to 12,676 in the case of the latter.
“New homes are already being built in Madrid and Barcelona because some areas have been left with very little stock”, says José Antonio Pérez, Director of Real Estate at IPE. However, there are other provinces, especially those in the East “with a large quantity of homes that are going to be hard to sell”, due to the vast number of properties that are suffering from a double hangover: that of the bubble and that of the nearby sea”.
Original story: Expansión (by Juanma Lamet)
Translation: Carmel Drake