New residential construction in Spain has all but disappeared, guaranteeing their will be a shortage of the new homes that people want in years to come.
There were just 3,106 planning approvals for new residential homes in November, down 32pc on last year (43pc year to date), and 95pc compared to 2006, according to the latest figures from the Government.
With only December’s figures to come, it is safe to forecast that there will be less than 50,000 planning approvals in 2012, compared to 78,000 in 2011, and 866,000 in 2006.
There are several reasons for the collapse in planning approvals, including a glut of new homes already on the market, and weak demand due to the economic crisis. But the main reason is the lack of financing available to developers, the few that still exist.
There are already signs of a shortage of the type of new homes that people actually want, which will get worse in the next few years, thanks to long lead times in the home-building business. It typically takes 36 months or more from drawing board to delivery.
Building marketable new homes is once again a good business for the few developers with access to cash who know what they are doing.