If the results of some of Spain’s biggest real estate promoters are anything to go by, the Spanish property sector is having a disastrous year. The combined turnover from home sales of some of Spain’s biggest listed developers (Acciona, Metrovacesa, Realia and Vallehermoso) fell 78% to 260 million Euros in the first 6 months of the year.
A fall of close to 80% in sales is a calamity for any business, and it is becoming life threatening for a large number of Spanish developers, like Martinsa-Fadesa, that have borrowed too much.
If you include the results of Renta Corporation, another listed developer (and one that claims to have a unique business model when all it does is refurbish buildings), then profits were down by 87% in the first 6 months, compared to the same period last year.
Nevertheless, Renta Corporation is the only developer of the group that is actually in the red – to the tune of 25 million Euros for the period.
Several of the biggest listed developers in Spain have not yet published their half-year results, and analysts expect them to have even worse news install.
Of the developers that have presented their results, Acciona was the hardest hit by a fall in sales. Acciona went from turning over 171 million Euros in home sales last year, to just 13 million this year, a fall of 92%.
The Spanish real estate business is highly fragmented, with over 40,000 developers, and the listed developers account for only around 5% of total sales. Most developers do not publish their results, but it is a fair bet that the vast majority of them are suffering more or less the same fall in sales.