A new study from Madrid’s association of developers claims there could soon be a shortage of new property in the capital, and house prices could explode as a result. I can’t help asking what’s this all about then?
The joint study by Asprima and property appraisal company Tinsa finds there are just 8,626 newly-built homes for sale in the Madrid region. But according to a separate estimate by Juan Blasco, Madrid’s housing supremo, the capital needs 50,000 new homes a year. Put the two together and you quickly get an acute housing shortage.
If this is all true, shouldn’t developers in Madrid should be revving up their engines and rubbing their hands at the prospect of sales after 3 years in the desert?
The report itself warns that developers should start building “urgently to avoid a collapse in supply that triggers a surge in prices in the short-term.”
But the last report produced by this bunch at the end of 2009 said there were 48,000 new homes on the market, not too far from the current figure of 40,500 used by the Ministry of Housing. Have developers sold some 40,000 new homes in Madrid over the last 10 months? Not that I was aware.
When developers have open their mouths in the last few years it’s usually been to say something self-serving or scream for government support, so it’s difficult to see what they are driving at here. But don’t be surprised if we soon hear them arguing for government money to build new homes and avoid a housing shortage. Could it be they are just softening us up?
Or maybe they are telling the truth and Madrid is soon to suffer an acute housing shortage and price surge. But it’s difficult to image a shortage of newly-built homes in the Madrid area; they have been building like crazy around the city for most of the last decade (a bit like the coast really).