26 November 2015 – El Economista
24.9% of the homes completed since 2008 remain unoccupied, according to a report entitled “In-depth analysis of the housing stock 2015”, compiled by the real estate valuations, analysis and advisory company, Tinsa.
1.56 million new homes have been constructed in Spain since 2008, a figure equivalent to 6.4% of the total real estate stock, of which 389,000 remain empty. It estimates that it will take an average of 2.5 years to find owners for thema all, according to the study. (…).
Therefore, Tinsa considers that, in general, this stock of new homes will not be fully occupied until the first half of 2018.
In turn, this scenario implicitly assumes demand equivalent to 150,000 new homes per year will be sold, self-promoted or rented, over the coming years.
Nevertheless, in areas where the surplus falls below 10% of the constructed stock, it estimates that it will take only 1.2 years for them to be occupied and in areas where the surplus exceeds 50%, itestimates that this time period will increase to four years.
In this sense, funding difficulties, the increase in unemployment and the outlook of falling prices have been the factors that have slowed the number of sales.
Prices have not still adjusted to the market
Tinsa believes that prices have still not adjusted to the market and that they still need to fall for almost one third of the stock located in the areas that have seen the most construction activity in recent years.
The company also considers that prices will remain stable for 41.3% of homes, will decrease by between 0.1% and 6% for 29.5% of homes and will rise by between 0.1% and 6% for 29.1% of homes. (…).
13.9% of homes are still owned by property developers
13.9% of the empty new homes are still owned by property developers, whilst the remaining 86.1% are owned by other organisations, mainly banks.
In this context, it is hard to estimate what percentage of empty new homes are not being marketed, since it depends on the operators.
Amongst the reasons for the existence of this stock are that home owners would rather wait for prices to rise to obtain higher returns and also that no effective demand exists.
Meanwhile, the company highlights the reasons why homes on the market are not being sold or rented, including insolvent demand, poor location in some cases, high prices and the lack of established environments (local amenities etc).
Percentage by province
By province, Almería has the highest proportion of empty properties, with 38.9%, followed by Cuenca and Castellón, with 37.1% and 36.1%, respectively.
By contrast, Álava is the province with the lowest proportion of empty homes, with 10.3%, followed by Guipúzcoa with 15.2% and Navarra with 17.6%.
Nevertheless, in Madrid and Barcelona, construction needs to begin to avoid shortages within the next two years. This is also the case in the cities of Málaga, Granada, Girona, Oviedo, Santander, Vigo, Pontevedra, San Sebastián, Gijón and Avilés.
The same situation has also been identified in certain municipalities on the Costa del Sol, on the north-east coast in Girona and in Cádiz, as well as in some of the island regions, such as on the Balearic Islands and Tenerife.
Original story: El Economista
Translation: Carmel Drake