Construction cranes are once again appearing in the southern areas of the Costa Blanca, one of the area’s hardest hit by the collapse in Spain’s residential property market.
Fifty-two new developments have been started on the coastal stretch, including more than 1,800 new homes, El Mundo, the Spanish daily, reports. New construction is focused on the region known as La Vega Baja, including Torrevieja, Orihuela, Guardamar del Segura, Rojales, Ciudad Quesada and Pilar de la Horadada.
The news is surprising, considering there are hundreds of thousands empty homes in Spain. Recent debate has focused on turning empty projects into social housing, with little interest in new construction.
But developers in Vega Baja saw an uptick in foreign interest last year, which prompted the new mini-boom of projects. About 20 percent of the homes sold in the Valencia region are in Vega Baja, and the buyers are primarily foreigners, according to government data.
New projects in development are much different than the massive projects built around golf courses during the boom years, the paper reports. Most of the developments are small, usually less than 150 homes and feature modern designs and better quality construction. They are also priced 20 to 30 per cent below the boom-year prices. Front-line beach houses start at €225,000, falling to €125,000 further away from the coast.
Foreigners, primarily from Scandinavia, Belgium and Russia, are the main targets for the new developments. But developers say they have learned lessons from the crash.
“We can’t make the same mistakes as we did in the past, when we sold to clients, especially foreigners, homes made of match sticks,” one local developer told El Mundo.
The current developers typically are local, not the big regional interests that drove the last building boom. Most of the developers are self-financed, another contrast to the building boom, when cheap money from banks fueled developments that often made no economic sense.
Spain’s banks are still trying to jettison bad assets and developments constructed during the boom, which makes them reluctant to invest in new projects. Nevertheless, there are signs of renewed interest in property for sale in Spain.
Juan Miguel says:
“Hope springs eternal in the breast of the believer!”
One word sums up these developers, IDIOTS
Proving – The attitude which caused this enormous glut is still very much alive and well.
“Africa begins at the Pyrenees” QED
I think after living in Spain we all now know where “Mickey Mouse” lives and it’s not Disneyland Paris.
There must be something wrong with me “I still love Spain!”
Phil says:
Most common sense people would get rid of their existing stocks at bargain prices before building 1000’s of new properties. When buyers compare style and quality they won’t want the existing rubbish so many of these will still scar the landscape.
As is usual, Spain do have an exceedingly large bunch of idiots running things such as ‘we’ve a glut so we will build more’, ‘our golf courses are quiet so we will increase prices’, ‘let’s put up our property taxes’, ‘let’s tax solar power’, etc etc
Further, we will let all the crooks and scammers who caused our boom and crash to get off scot free, run off elsewhere with their filthy loot, and under no circumstances will we regulate our property industry as we’d like another boom and crash. After all we are the market leaders in this flawed model copied elsewhere, we should franchise it! Ha Ha
Spain also known as Cuckoo Land.