The glut of new homes on the market that were built in the boom years but never found a buyer is slowly declining, though how much depends on whose figures you believe.
The Spanish Ministry of Public Works (Fomento) and Tinsa – Spain’s leading appraisal company – have recently released figures quantifying the glut of new homes on the market. ‘New’ is a relative term; many of them were built a decade ago, and have lain empty ever since, with no interest from buyers.
According to Fomento, there were 492,000 such homes languishing on the Spanish property market at the end of 2016, down 4% from the previous year, the lowest level since 2007, but still down just 24% compared to the peak year of 2009.
Put another way, the glut of built-but-never-sold homes fell from 650,000 in 2009 to 492,000 at the end of last year.
According to the same figures, the glut has declined the most in the Basque Country (-34%), and 50% of the glut is located in just three regions: Andalucia, Catalonia, and the Valencian Community.
Spanish New Homes Glut figures From Tinsa
The figures from Tinsa tell a similar story of a steady decline in the size of glut, but the numbers are more optimistics. According to Tinsa, there are 340,000 newly-built-but-never-sold homes on the market, equivalent to 21% of those finished since 2008.
Tinsa reveal that there are 63,100 new homes under construction, 15,900 in Madrid, 5,500 in Alicante, and 4,500 in Barcelona province.
Tinsa found stock of building land available around Spain is enough to 1.6 million new homes, which would supply the market for almost nine years.
The problem is, the land is not where the demand is. Building land is in short supply in the north of Madrid, in Barcelona, Malaga City, and on the coast in Ibiza, Palma, Marbella, Las Palmas, Tenerife, and some areas of Alicante. This is pushing up building land prices in those areas, which feeds into higher house prices.