There were more than 26 million homes in Spain at the end of 2011, according to estimates by the Housing Department in the Ministry of Public Works (Fomento).
Spain’s housing stock increased by 4,984,420 to 26,018,179 residential dwellings between 2001 and 2011, and increase of 24pc, reveal the latest figures from the Government.
The population increased by 5.9 million (5.8pc) over the same period, which means that almost one new home was built for each new resident during Spain’s building boom, according to a recent article in the Spanish financial daily Cinco Días.
Now comes the decline
Along with the hangover from Spain’s building boom, the next problem will be a declining population and unfavourable demographics.
Spain has one of the lowest fertility rates in the world, and one of the fastest ageing populations, meaning that deaths will soon exceed births. The population is already shrinking thanks to net emigration, both of Spaniards and immigrants. A shrinking population means more debt per capita in future, which begs the question, how will Spain pay off its debts?
Of particular worry is the decline in household formation and the population between 15 and 40 years old. There are 34pc fewer Spaniards in the 15-24 years cohort than in the 25-34 years cohort. That means fewer families each year, and reduces demand for housing.
In the years before Spain’s property boom, there were around 150,000 new households created each year. With immigration that rose to a peak of 400,000 in the boom, but has been falling ever since. The forecast is just 60,000 new households each year through to 2017.
A report by the Bank of International Settlements in 2010 estimated that demographics could reduce Spanish house prices by 2pc per year to 2050. Only Portugal was forecast to be harder hit by demographic pressure on house prices, as illustrated by the following chart: