The inventory of newly built Spanish homes languishing on the market in search of a buyer rose by 20% in the first 6 months of the year, according to a recent article in the Spanish daily ‘El Pais. Most of the unsold homes are located on the Spanish coast and around Madrid.
The article is based on new research by the Ministry of Housing and the University of Navarra which found that there were 503,000 new homes on the market at the end of June, almost 22% more than at the end of 2007. The article points out that, given the lack of reliable data in the Spanish property sector, the true figure of unsold new homes could be much higher.
Beatriz Corredor, Spain’s Minister of Housing, recently forecast that the glut of new properties on the market would rise to 650,000 by year end, though Tinsa, one of Spain’s leading appraisal companies, says 920,000 is more likely.
For several years at the height of the recent construction boom Spain was starting more than 800,000 new homes a year, more than France, Germany, and the United Kingdom combined. Developers are still finishing new projects started at the height of the boom, which means the glut of unsold homes is still growing. Demand has collapsed, and residential home sales of some of Spain’s biggest developers are down by more than 90%.
The inventory of unsold new homes rose by more than 30% in Castilla-La Mancha and The Canaries, and by more than 60% in Catalonia. Inventories rose by 73% in the provinces of Lugo (Galicia) and Segovia (Castilla y Leon).
The article explains that, thanks to 2 mega urbanisations full of empty properties – Marina D’Or in Castellon province (Costa Azahar, Valencia), and Seseña in Toledo province (Castilla-La Mancha) – Castellon and Toledo have the highest proportion of unsold new homes per capita in Spain.