Leading developers ask government for 40 billion Euros cash injection to ease housing market crisis

The G-14 association of leading Spanish developers has called on the government to inject an extra 40 billion Euros into the economy to stimulate the housing market and soften the “excessive downturn in the construction sector.”

Speaking today at a press conference, Pedro Perez, general secretary of the G-14, said that the 10 billion Euros stimulus package already announced by the government will not be enough to deal with the effects of the credit crunch. He urged the government to follow the example of the British government’s recent massive injection of liquidity into the financial system.

Perez argues that, if present trends continue, there will only be 200,000 housing starts in Spain this year, well below a real housing demand he estimates at 350,000, and far below the 600,000 plus in recent years.

Rather than drop their own inflated prices to stimulate demand and shift some of the 500,000 newly built properties they have in stock, the developers are, as usual, calling on the government to make it easier and cheaper, in the short term, for buyers to load up with debt.