The glut of never-sold-homes has been steadily declining in recent years, but some of them will never find a buyer and will have to be demolished, say industry insiders.
The glut of homes built during the boom years that never sold will decline another 20% this year to 388,000, and a similar amount next year, ending 2017 around 315,000, argues a new report from Spain’s biggest real estate servicer Servihabitat, part of the CaixBank group.
Per capita the glut is biggest in the northern autonomous region of La Rioja (world famous for its wines), followed by Castille-La Mancha and the Valencian Community.
The glut is smallest or nonexistent in Madrid, the Balearics, the Canaries, and Catalonia.
Rising sales are helping to digest the glut, which peaked in 2009 with a never-sold home inventory of 649,780, according to Government figures (see chart below).
This year will end with 445,000 homes sold, up 26% on last year, 70% of them resales, and will rise another 12% to around 500,000 next year, forecast Servihabitat, with investors looking for alternatives to pitiful interest rates being one of the main sources of demand.
Despite the gradual decline of the glut, some homes will never sell and have to be demolished, warns Juan Antonio Gómez-Pintado, President of the Spanish association of developers and constructors. “Demolition will be necessary in some cases because buyers today prefer new developments that are environmentally friendly, built with better materials, and better designs than 10 years ago,” he recently said, quoted in the Spanish press.
Servihabitat forecast that the national average house price will rise 4.6% this year, and 4.3% next year, but most of that increase will come from Madrid, Barcelona, and holiday-home markets in the Balearics and the Canaries, where price increases will be significantly higher than the national average.