There are far fewer new homes on the market than previously thought say developers, but Government figures say otherwise.
A lack of reliable data makes it difficult to know for sure how many new homes are currently for sale, but the number matters a great deal. The higher the number, the longer the property crash will drag on, and the further house prices will fall.
According to some estimates the new home glut is more than 1 million strong, but last week David Taguas, president of Seopan, the builders lobby, waded in with a new estimate of just 350,000 new homes on the books of banks and developers.
“There must be around 350,000 homes, which is a serious amount, but not that bad when you consider that, under normal circumstances, it is the equivalent of just one year’s demand,” Taguas told the Spanish press.
According to Taguas, who used to run President Zapatero’s Economic office, “the glut of properties owned by developers and banks has been exaggerated.
“The real problem is the stock owned by banks,” he added, for good measure.
730,000 new homes for sale say Government
But according the Spanish Government (Fomento), the stock of new homes for sale numbered 730,000 at the end of October, more than double the developers’ estimate.
To make matters worse, the glut is still growing as more new homes are finished than sold, with another 34,112 new homes added to the glut over 12 months to the end of October 2010.
There is a danger that part of the excess stock will never sell, as falling land prices mean new homes can now be built cheaper, making already-built homes look expensive and out of date.
Of those 34,112 new homes added to the glut, 44% were in The Valencian Community, followed by Galicia (13%), and Andalucia (8.7%).
On the other hand Catalonia and The Balearics managed to reduce their new home glut a fraction in the same period.