This is a website for buyers, owners, and sellers of property in Spain, offering reliable information and resources to help you get things done with confidence. It is run by Mark Stücklin, author of the Spanish Property Doctor Column in The Sunday Times (2005-2008), and the book ‘Need to Know: Buying Property in Spain’ published by Collins.
Mark Stücklin
Rather like the property market, Spanish home building rebounded remarkably well in 2021 after slumping with the pandemic in 2020. But building activity was already on the slide before Covid-19 came to town, and it is not yet clear if the building industry can look forward to a few more years of growth, or revert to the downward trend that was on display before the pandemic.
Spanish housing starts increased 23% to 107,518 in 2021, according to figures just released by the Higher Council of the Boards of Architects of Spain (chart above). This signals “a return to the situation before the pandemic,” said the association’s president. Rehabilitation projects were up 43.5% compared to 2020 and 30% compared to 2019.
The next chart, using figures from the Spanish government (MITMA) shows the annualised change in housing starts every month from January 2019 to September 2021, the latest available. You can clearly see the slump with the onset of the pandemic in 2020, and the subsequent recovery in 2021.
The recovery is not playing out equally around the country. In the first nine months of 2021 housing starts were up 110% in Murcia, 56% in Andalusia, and 41% in Madrid, but down 9% in the Valencian region, and 1% in Catalonia. In Barcelona province, where the capital city’s municipal government is hostile to housing investors, home starts fell 9% last year even compared to the disaster that was 2020.This is bound to reduce the supply of homes for sale in Barcelona, and push up property prices.
If you look at housing starts since they started to recover in 2014 after the real estate crash, you can clearly see the building industry losing momentum in 2019, before the pandemic, with five months of negative growth between May 2019 and January 2020, compared to just two months between May 2015 and May 2019. Growing political risk, and Spain’s inefficient and costly planning system was taking its toll.
The growth story in the recent figures looks good compared to 2020, which was an easy year to beat. The question is, will the Spanish home building industry enter a new period of growth driven by the current growth in homes sales and the much-hyped EU recover funds that the Higher Council of Architectural Boards argue will help with the green transformation of Spain’s housing stock, or will high costs, bureaucracy, and hostile politicians drag the industry down again in 2022?
