The builders association of Barcelona (APCE) has lost 30pc of its members since the crisis started.
30pc of builders and developers associated with the APCE in the Barcelona area have
gone out of business since the crisis struck, reveals Lluís Marsà, the new President of the
“Unprecedented” is how he describes the situation the sector is going through. He also voiced a familiar complaint from developers about unfair competition from banks, who are “selling homes well below their construction costs, driven by the financial situation.”
The average construction cost for developers today is €900/m2, to which you have to add urbanisation costs of €20,000/home, and architect fees, taxes, and land costs.
Despite this bleak outlook, Marsà argues that house price falls have already largely taken place. Developers have been saying this for the last 4 years, to no avail.
It makes no difference what developers say: House prices will bottom out where people can afford them. They may even under-shoot for a few years, as they overshot for a few years during the boom. However, the growing foreign interest in property for sale in Barcelona will help build a price floor above the level at which local demand would have established it.