27/03/2014 – Cinco Dias
When the real estate bubble burst and empty and underused new houses flooded the market, experts foresaw that getting out of the recession would depend on selling them fast. There were over 700.000 dwellings in excess.
During the next five years, only one in five of these houses have sold, according to a recent report by a construction company Cepco. At the scratch, Spain had 688.044 new dwellings for sale that became 557.450 units at the end of 2013 (just 18.9% less). (…).
It is worth to mention that when the price slump began in 2011, sales went up. What is more, experts claim that the crisis would not have been so damaging if banks had opened access to the credit. However, the banks themselves got in a difficult position and were pushed to sell their property out at bargain prices.
Whatever the cause was, in 2013 the sector started to observe excess stock shrinkage. To illustrate, while in 2010 market remained practically ailing, in 2011 about 6.000 units were sold (around 0.9% of the total). In 2012, another 43.000 dwellings found a purchaser (cut by 6.3%). And finally, 2013 marked significant speed up as the stock diminished by 80.605 houses (12.6%).
Putting it in other words, 130.594 houses of the excess stock sold during the recession, out of which 61% were acquired last year. Just when Spain started to show revival signs.
Economic Recovery by Regions
The question when the stock in excess will disappear completely remains unanswered. Specialists in the sector do not dare to calculate approximate time as Spanish economy is still anemic in terms of employment and financing. However, in some places the stock reduces its volume.
For example, in Andalusia excess shrank from 114.147 houses in 2009 to 71.386 at the end of 2013 (a 37.4% cut-off). In the Canary Islands the decrease reached 40% and now the stock there represents 25.356 units. In Catalonia the new dwellings in excess reduced by 18.7%.
Madrid and the Valencian Community close the top absorption ranking with declines by 28.9% and 21.65%, respectively. Also, higher rate goes along with the most attractive zones in the market. The aforementioned five communities cluster 58% of all the stock in excess.
Moreover, in general terms, there are regions where too many houses do not keep authorities awake at night. For instance, in the Balearic Islands there are only 12.600 houses in excess. For Cantabria, Cepco estimates 1.689 dwellings, for Extremadura 794 units, for Galicia 28.200, for Navarra 2.200 and for the Basque Country 17.777 houses. On the opposite side there are Castilla y León, Castilla La Mancha, Murcia and La Rioja where excess houses are still troublesome.
Original article: Cinco Días (Raquel Díaz Guijarro)
Translation: AURA REE