The latest figures from Spain’s Ministry of Development show how drastic the collapse in Spain’s home building industry is turning out to be. According to the Ministry of Development there were just 31,348 residential planning approvals in the first three months of the year, a decline of 64.1% compared to the same period last year. The residential construction business is imploding, taking the Spanish economy down with it.
Given the Spanish love affair with charmless blocks of flats, it comes as no surprise to learn that planning approvals for flats have plunged the most, down 67% in the period, compared to a fall of 54% for detached homes. Flats are now 75% of new building projects, down from closer to 80% in the boom.
Looking further back, the fall in planning approvals is even more dramatic, which helps illustrate how big and painful the economic adjustment underway is proving to be. Planning approvals last year, at 265,000, were already 59% lower than 2007 (651,000), which in turn was 25% lower than 2006, when there were an all-time record of approximately 865,500. Compared to 2006, when there were an average of around 215,000 planning approvals per quarter, the latest figures represent a drop of 86%.
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