Residential planning approvals are still falling fast, showing that the building sector has not yet touched bottom.
Residential planning approvals were down 24.4% to 23,559 units in Q1 compared to same time last year, according to latest figures from the Ministry of Development.
Dismal as this news is for home builders, the fact that the rate of decline appears to be slowing can be interpreted as good news. Planning approvals were down 35.7% as recently as January, and fell by 58% last year. In contrast a decline of just 24.4% doesn’t seem so bad.
At this rate there could be less than 100,000 planning approvals this year, compared to around 900,000 at the peak of the boom. These figures show how badly home builders have been hit by Spain’s property crash.
As usual, the vast majority (75%) of planning approvals in Q1 were for blocks of flats, the rest being for other types of housing. Flats have been hardest hit by the market slump, so planning approvals have fallen by more.
Whilst planning approval requests for new homes have slumped, refurbishments have risen slightly. 7,563 refurbishment applications were approved in the year to March, 8% more than last year. A welcome increase no doubt, but not enough to dig the industry out of its hole, whatever the government says.
In another sign that the sector is far from in the clear, today it emerged that Barcelona-based developer Fbex has been forced to seek protection from its creditors with 640 million Euros of debt.