Spain has long been troubled by an overhanging supply of vacant properties, thanks to the country’s financial bust following a construction boom. Now, though, the country is already building again, according to official stats from the European Union.
Eurostat figures show that construction output in Spain jumped 22 per cent in August 2014 compared to the same month in 2013, the second highest result after Slovenia. On a monthly basis, construction grew 2.7 per cent, the highest in the EU.
Indeed, Spain’s growth was far ahead of the rest of the eurozone, which on average saw growth of 1.5 per cent month-on-month. The eurozone has now recorded two months in a row of improving construction output and Spain has kept pace, posting a 1.5 per cent increase in July. Its 22 per cent growth year-on-year was also double the rate of July, when activity rose 11.6 per cent year-on-year.
The figures follow equally positive signs from the Ministry of Development, with applications for new home building licences up 3.3 per cent between January and August 2014 compared to the same eight months in 2013. 2,063 licences were issued in August 2014, a surge of 30 per cent from the same month last year and the second month of growth in a row following a period of steady decline after the recession struck.
If the momentum continues to build, applications are forecast to top 37,000 by the end of 2014, above 2013’s total applications (34,288) albeit still below 2012’s 44,162.
While construction is a key component in a property recovery, though, is more property what Spain needs? The majority of the current building licence applications are for apartments, with around one third for single family homes.
Marc Pritchard, Sales and Marketing Director for leading housebuilder Taylor Wimpey España, says that while the oversupply is still there, it is in areas where foreigners or even locals don’t want to live or spend their holidays.
The current wave, on the other hand, is being fuelled by property demand in popular vacation hotspots.
Even so, he notes that that the growth is “not as big as it seems”.
“First of all we have to see it from where we are coming from,” he tells TheMoveChannel.com, “which is literally no construction activity at all. Consequently it’s relatively easy to show a growth of 30 per cent.”
Nonetheless, demand for the new properties, in some specific locations – “along the Spanish Mediterranean coast and on the Balearic islands” – remains “very strong”, he adds.
“Brand new properties with the latest specifications, modern designs in sort after locations and at the right price, are however selling off plan.”
Source: The Movechannel