Housing starts in Spain have fallen by almost 80% since the economic crisis began in 2007, reveal new statistics from the Ministry of Housing. You don’t have to be a genius to work out how badly that will have hit the residential construction business in Spain. The sector has effectively been decimated, which helps explain why unemployment in Spain is close to 20%.
The numbers show that there were 159,284 housing starts last year, down 79% from the 762,000 housing starts in 2006, the peak year of Spain’s residential building boom. Year on year, housing starts fell 51% in 2009, and 47% in 2008. Last year was the lowest figure since the Ministry of Housing started publishing these figures going back to 1992.
It is interesting to note that, last year, social housing and private housing starts were almost equal, on around 80,000 units (to put it another way, they built almost as many council houses as private homes last year).
In the boom years social housing starts were almost insignificant, despite, or perhaps because of the dramatic rise in house prices. The government is now making a big deal of its commitment to social housing, trumpeting last year’s parity between social and private housing starts, despite the fact that, year on year, social housing starts actually fell.
You might also wonder why the government is building any new homes when there already is such a huge glut of newly-built homes languishing on the market in search of a buyer. Spain does not need more new homes, it just needs prices to fall for the existing homes, and a more efficient rental market.
Finally, the figures also show that there were 425,228 construction completions last year, down 33% from 633,228 in 2008, and still way too high for the market.