Homes: New Builds Are Returning To Cataluña

28 January 2015 – Expansión

Cataluña started to construct between 4,300 and 4,500 homes last year, putting an end to seven consecutive years of decline in the number of new homes started.

At a press conference, the President of Barcelona’s Developer Association, Lluís Marsa, explained that since 2006, when 126,000 homes were built, the number of new builds has decreased year after year to a minimum of 3,036 homes in 2013.

Although the increase in the number of new builds since 2013, compared with the estimated closing figures for 2104, reveals a growth rate of 48%, Marsa recalled that in absolute terms, the number is still very modest, and so the sector “is still a long way” from what would be considered normal, he said.

The Developers’ Association estimates that Cataluña should be building between 20,000 and 25,000 new homes each year, but Marsa did not hazard a guess as to how many years it would take for the region to reach that volume, although he did say he was certain that the trend would continue to be positive in 2015.

In any case, builders understand that, gradually, the market is returning to normal, since “the price correction process has now been completed”.

One example of this is the study presented today by the entity, in collaboration with the the Housing Ministry, the Town Hall and Barcelona’s Provincial Council.

The study analysed 815 housing developments in the province of Barcelona, covering 20,165 homes and concluded that only 24.1% of the properties were pending sale, i.e. 4,859 homes.

Although this study analyses the supply of new housing only, and not the stock (of second-hand homes) accumulated in recent years, the data serves to verify that the few developments that are currently being built in Cataluña are being located only in areas with proven demand.

In this way, from the supply of 4,859 homes in the province, 924 are located in the city of Barcelona. It also highlights the current supply in cities such as Terrassa (where 377 new homes are up for sale), Sabadell (250 homes), Badalona (485 homes) and Sant Cugat de Valles (133 homes).

The price per square metre in the province of Barcelona decreased by 7% in 2014 with respect to 2013, and amounts to €3,046.

In contrast, in the city of Barcelona, where there are homes for sale in 166 developments, the average price per square metre is €5,000, down 4.1% from 2013, according to the study.

Nevertheless, there are important variations between districts, since a buyer could expect to pay €9,146 per sqm (13.1% more than in 2013) for a new build in Sarria-Sant Gervasi, versus €3,034 per sqm for one in Sant Andreu.

Meanwhile, Marsa complained about the difficulties that developers face when trying to access credit from banks to start or finish developments, and he pointed out that the restructuring of the banking sector has substantially reduced the number of entities and even more significantly decreased the number banks willing to lend.

The high level of unemployment and the strict requirements that still apply when it comes to applying for mortgages are just two of the other difficulties that individuals face when they want to buy a new home.

Likewise, Marsa said that although during the ‘boom’ years, 50% of all homes sold were new builds, they now barely account for one in three sales, and he forecasts that second-hand housing will continue to gain ground over the next few years.

Original story: Expansión

Translation: Carmel Drake