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Demolition day getting closer


The day when Spain will have to demolish some unfinished new developments is not far off now.

What to do with Spain’s glut of new homes and half-finished developments? People have been asking this question for the last five years, forlornly hoping the market would pick up, digest the glut, and take away the problem. Demolition was always seen as a last resort, but with every passing year that last resort gets closer.

The figures do not bode well. According to Spanish press reports there are still something like 750,000 new homes languishing on the market, maybe more, and hundreds of thousands more as yet unfinished (nobody knows how many), whilst new home sales are running at around 10,000 a month according to the latest figures from the National Institute of Statistics. At current sales volumes it’ll take more than a decade to digest the glut, by which time many of those “new” homes will be more than 10 years old. “Never previously occupied” is already starting to be a better description than “new”.

In the meantime, it costs a lot of money to maintain all these empty homes, so it’s not as if waiting for the market to recover is a cost-free option. Empty properties have to be guarded and maintained, and taxes paid. When you factor in the cost of capital, banks are spending tens of millions of Euros a year on empty properties that only depreciate further with every passing day.

The longer this situation drags on, the more sense it make to start demolishing some of the stock, for example the unfinished developments in areas with no demand. The Spanish press reports that banks are starting to make plans to demolish the most hopeless unfinished developments. Spain’s bad bank, the Sareb, is reported to have a budget of 103 million Euros set aside for demolitions.

Where should they start with the wrecking ball? Not on the coast, where there is diversified international demand and everything can be sold in due course, if the pricing and marketing is appropriate. The real problem is around the provincial capitals of the interior, where the population is declining and I fail to see where the demand will ever come from.

Demolition mad in Andalusia

Len & Helen Prior
Len & Helen Prior
In fact, there have been some demolitions in recent years, but all of the wrong sort. Rather than demolishing half-finished developments that can never be sold, the authorities in Andalusia started by bulldozing homes occupied by British pensioners like the Priors, quite literally tearing down the house around them. Only yesterday the regional Government of Andalusia (the Junta) got the green light to knock down nine more homes in Llanos del Peral, Zurgena, currently owned and occupied by British expats.

SPI Member Comments

Thoughts on “Demolition day getting closer

  • A VERY sad & heart-wrenching situation to be in, but a warning to all – Just because an ‘existing property’ for example appears on the title deeds does not mean it´s legal. The Priors property was built in a PROTECTED AREA, to which in my experience, the Regional governemnt would not agree to. The local town hall, can sign their half of the paperwork, in the hope that the regional will agree or just sign their half & leave the final decision up to the regional, but the Regional must give the final permission. I do not know the full story of the Priors, so I am assuming they only had permission from the local authorities. With that in mind, I blame the solicitor – they would have known the land was protected, as it will state in the deeds/ in the town hall records. The solicitor would also know it is illegal to build on protected land, which would definitely have come to light if planning went throught the correct paths, even locally.
    I know of people who have built on not just protected land, but STRICTLY protected land (illegally), AND had their houses even added to the deeds, but it will NEVER be classed as “legal”, and can still be ordered to be demolished many years later.
    The problem is when a purchaser buys with cash, &/or with a not so good solicitor, but the last I heard was that new requierements have been put in place regarding certain paperwork that needs to be requested from the town hall before a sale can proceed which will highlight the illegality…atleast if a mortgage is applied for, which would then be turned down.
    Please excuse any ignorance on my behalf about these poor peoples plights – I am only trying to make the rest of us more aware of what can still happen & to take every caution possible. When you think you/your solicitor have it all covered, check again & again & ask lots of questions.

  • I would like to highlight a matter to fellow readers about an aspect of spanish law that many people may be unaware of. I was tricked by the ‘official’ translator (who was also a ‘friend’) at the Notario, regarding deeds and powers of attorney, merrily signing away everything under his professional guidance. If his fraud had not been discovered within 5 years, he would have got away with his crime and I would have been left penniless. There are very different laws regarding time limits on crime in Spain. Get good advice from a recommended lawyer who speaks english well and be very careful what you sign, and if you are concerned, make sure you get your documents thoroughly checked within 5 years of the transaction.

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