The number of new homes being built in Spain has slowed dramatically this year in response to falling demand, and a glut of new properties on the market.
Planning approvals in the first four months of the year fell 56% compared last year (from 276,588 to 120,680), according to new figures from the Ministry of Development. The number of planning approvals started falling last July, when they had reached an annualised rate of more than 700,000 per year. If the trend continues, there will be fewer than 350,000 planning approvals this year.
Housing starts are holding up slightly better than planning approvals. According to the Ministry of Housing, housing starts fell 36% in the first quarter (to 108,275) says the Ministry of Housing. Over the 12 months to the end of March there were 484,199 housing starts, 26% less than the previous 12 months.
Housing starts for government subsidised social housing were down 58% in the first quarter, despite government plans to use an increase in social housing to cushion the fall in the construction sector.
Whilst housing starts have been plunging, the number of new build properties completed has been rising. Not including social housing, 165,698 new properties were completed in the first quarter of the year, 23% more than the same time last year. Over 12 months 610,349 properties have been finished, an increase of 3.4% over the previous 12 months.
The Housing Ministry has also revealed that 423,000 new households were created in 2007, of which 80% are owner-occupiers, and 20% renting.
By the end of 2007, there were 24.5 million properties in Spain, an increase of 2.7% over 2006. 16.77 million properties, or 68.5% of the total stock, are used as primary homes.