The housing glut is largely concentrated in coastal areas, according to a new study.
Spain has a stock of 800,000 newly built homes (end of 2010), of which 85pc, or 722,500, are located in coastal areas, probably built as holiday homes, according to a new report from Catalunya Caixa, a savings bank. The new homes glut represents 3.2pc of Spain’s total housing stock.
The remainder a concentrated in Madrid, Castilla y Leon, and a few areas in the North of Spain.
The glut will swell by 150,000 new homes this year and 125,000 next year, says the report. That challenges Government assumptions that there will be just 200,000 new homes for sale by the end of 2013.
Household formation in the doldrums
According to the report, new household formation between 2011 – 2015 is expected to average 138,000 per year, far below the average of 430,000 during the boom years from 2000 – 2008, making it harder to absorb the glut of new housing.
Holiday home demand is less affected by new household formation in Spain, as demand is diversified around Europe. Nevertheless it is just one more reason to expect weak demand for Spanish holiday homes for the next few years.