The glut of newly built homes languishing on the market in search of a buyer rose by 12% to 688,044 in 2009, according to a new report on Spain’s housing overhang by the Ministry of Housing. Taking into account 300,000 unsold new homes still under construction and close to completion, the glut rises to around 1 million properties.
Looking for scraps of good news, the 12% increase in the glut last year was “the lowest level in recent years, in which increase were always above 40%” said Beatriz Corredor, Minister for Housing. The report also reveals that there were 529,000 new homes under construction at the end of 2009, some 100,00 less than a year before.
Corredor forecasts that Spain’s glut of new homes – by far the biggest in Europe – will soon start to decline as more new homes are sold than come onto the market.
Too many holiday homes
An added problem, however, is that Spain has built too many holiday homes on the coast. 61% of the glut is concentrated in just 17 of Spain’s coastal provinces, including the Balearics and the Canaries, whilst just 14% of the glut is in the interior, mainly around Madrid. “The unequal geographical distribution means the absorption rate wont’ be the same everywhere,” points out Corredor. No shortage of holiday homes for sale anytime soon then.