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.