A recent study tries to estimate the glut of homes for sale on the coast, where foreigners tend to buy holiday homes.
Anyone thinking of buying or selling a property on the Spanish coast should be interested in knowing how much property there is for sale. The bigger the supply, the more pressure there is on vendors to lower prices.
A recent report by consultants RR de Acuña y Asociados, who publish a yearbook of statistics on the Spanish property market, tries to estimate the inventory of homes for sale in different parts of Spain, including coastal provinces.
According to their estimates, there were 88,000 new homes, 243,000 resales, and a total of 331,000 homes for sale in coastal areas at the end of 2014.
Dividing the stock of homes for sale by annual sales volumes for each province, RR de Acuña arrive at their estimation for stock absorption times, or SAP, (tiempo de disolución de stock TDS), measured in years.
The following legend explains how to interpret each map. Green means between half a year (or less) and one and a half year’s worth of stock, whilst at the other end of the scale, dark red means between six and a half and (more than) ten year’s worth of stock.
The first map shows the national picture for all types of property (both new and resale), with a national average stock absorptions period of 6 years.
The next map shows the SAP for all types of property in coastal provinces. According to RR de Acuña’s calculations, the glut is biggest in Barcelona province (not city), the Balearics, and Valencia’s Castellon province, home to the Costa del Azahar.
NEW HOMES ON THE COAST
Next comes the SAP map for new homes on the coast, showing a glut in the provinces of the north east coast, but relatively low stock levels on the Andalusian coast.
RESALES ON THE COAST
Last comes the SAP map for the resale home inventory on the coast, showing almost the opposite picture to the new build map, with higher inventories in the south, and lower inventories in the north east.
Overall, whichever way you look at it, the inventory of homes for sale in most coastal areas, both new and resale, will take years for the market to digest at current sales volumes. That suggest that, with the exception of some hotspots like Marbella and the new development market on the Costa del Sol, the property market on the coast will be dragged down for years to come by high inventories.