Beatriz Corredor, Spain’s minister for housing, says now is a good time to buy property in Spain, as prices are only rising in line with inflation. She also urged developers to make an effort to sell their stock of empty property by adjusting to demand, whatever that means.

Speaking in a radio interview today, Corredor also noted that some developers have dropped their prices, making this a good time to buy a newly built property. She did, however, distinguish between people who “really need a home” and those looking for a second home or holiday home. According to Corredor, prices for second homes have not fallen as much because vendors are still holding out for higher prices.

On the question of the excess supply of property in Spain, Corredor said there are around 600,000 homes on the market, compared to annual demand for 450,000 homes. On this basis she argued that the constructions sector need to adjust to an ‘intensive’ model of refurbishing existing housing stock, as opposed to the ‘extensive ‘ model of new construction that has characterised recent years.

She also pointed out that recent housing starts of 600,000 or more a year were unsustainable, and that the real estate sector’s share of Spanish GDP, at 18%, was “far higher than desirable” for a country like Spain, bearing in mind an EU average of around 12%.