One third of coastal new developments still on market after 3 years

A third of all new developments on the Spanish coast have been on the market for more than 3 years, according to a new study from the consultancy DBK.

The company looked at 326 new developments for sale on the coasts of Catalonia, The Valencian Community, Murcia, Andalucia, The Balearics, and The Canaries. 34% of these new developments have been on sale for more than 3 years.

The report reveals that almost half of the projects studied are now selling ‘key in hand’, compared to less than 10% three years ago, when off-plan sales were the norm.

DBK forecast that sales of newly built properties on the Spanish coast will fall by 15% a year for the next 2 years. That translates into 90,000 properties sold in 2008, and 76,500 in 2009.

This continues a trend that was already underway in 2007, when sales of holiday homes on the Spanish coast fell 4%, says the report. Last year’s sales performance varied considerably by region, with sales falling by more than 20% in Catalonia, The Canaries, and The Balearics, but rising by 22% in Andalucia, and 14.5% in Murcia.

The report warns that the stock of unsold new properties on the Spanish coast is growing, estimating that it swelled by 315,000 properties between 2004 and 2007. It also warns that the market situation is deteriorating due to falling buyer confidence, rising interest rates, rising mortgage delinquencies, the credit crunch, and a rising Euro that is pricing British buyers out of the market.