28 February 2019 – Idealista
In 2018, 100,722 building permits were granted to construct new homes, 25% more than a year earlier; a figure not seen since 2009, when 110,849 permits were granted, according to data from the Ministry of Development. Of the total figure, 79,453 were granted to build blocks of flats and 21,254 to build houses.
In this way, building permits have now recorded five consecutive years of increases. In 2013, they hit a historical low (34,288 units), a figure that represented a decline of 96% from the peak year of 2006 when 865,561 permits were granted.
Despite the good results in 2018, the construction sector considers that a healthy market is one that is capable of generating around 150,000 new work permits per year.
Why is it so hard to build 150,000 homes per year?
Daniel Cuervo, Director at Asprima, points to several factors:
– Building permits take a long time to be granted (…). In general, Town Halls take 14 months to grant a licence, on average (…).
– Financing has returned to the real estate sector, but it is not immediate (…).
– Urban planning in Spain is paralysed due to the high level of legal uncertainty (…).
Meanwhile, Daniel del Pozo, Director at Idealista/News, provides some additional explanations:
– Lack of awareness about how the market works and of the real demand by the Public Administration (…).
– The main land portfolios are owned by the banks, Sareb and the funds (…) which are all waiting for prices to rise before releasing the most sought-after plots.
– The political uncertainty, the threats of interventionalism and/or changes in regulation in the real estate market also play their role (…).
Original story: Idealista
Translation: Carmel Drake