More new homes are still being finished than sold according to research by Catalunyacaixa, a savings bank.
There were 818,000 new homes on the market at the end of September 2011, 3pc more than a year earlier, as the completion of new homes started at the tail end of the boom still outnumbers sales.
The following charts illustrate this problem:
The first chart shows how supply (grey bars) is still larger than demand (red bars). The second chart shows the overall stock of new homes, and the last chart shows that stock as a percentage of the overall housing stock.
Collapse in new household formation
One of the big problems for both the Spanish economy and the housing market is the precipitous decline in new household formation – the main driver of demand for new housing. As you can see from the middle chart below (gráfico 4), this has collapsed since 2006 and is expected to remain at record lows until at least 2015.