Spanish property slowdown produces bargains for all

As media coverage of the UK and Spanish property markets increases in line with the house price decreases, now might be a good time to look at the true status of the real estate sector across Spain.

A year ago planning approvals reached an all-time high for Spain at an annualised 700,000, as developers, although sensing the impending slowdown, had not started to halt applications in the notoriously extended planning pipeline. They have now, declining to around 120,000 for the latest quarter and looking like 350,000 approvals for the current year.

Given the current financial state of the Spanish economy and its engine-room construction sector, no-one is going to start building that many homes nor find buyers to sign-up for them.

Strangely, housing starts are holding up much better than planning approvals. According to the Ministry of Housing, housing starts fell by only 36 percent in the first quarter to 108,275. Over the 12 months to the end of March there were 484,199 housing starts, 26 percent less than the previous 12 months.

While housing starts dropped, the number of new-build properties completed has been rising. Not including social housing, 165,698 new properties were completed in the first quarter of the year, 23 percent more than the same time last year.

Over 12 months 610,349 properties have been finished, an increase of 3.4 percent over the previous 12 months - more than Britain, France and Germany combined.

The Housing Ministry has also revealed that 423,000 new households were created in 2007, of which 80 percent are owner-occupied, and 20 percent renting. 423,000 purchases made from the 610,349 homes completed is a success rate of 70 percent sales – pretty good, especially in recessional times?

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By the end of 2007, there were 24.5 million properties in Spain, an increase of 2.7 percent over 2006.
16.77 million properties, or 68.5 percent of the total stock, are used as primary homes.
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Sales of unsold housing could start to increase as new Spanish Government tax breaks and subsidies, coupled with heavily discounted prices, tempt buy to let investors back into the market and first-time buyers to start looking seriously again.

The current scenario might also look tempting for north European buyers: Widest choice, at the lowest prices, with the greatest tax breaks could be the new Holy Grail for investors and own users – first time buyers as well as vacational use - especially couples planning retirement?

Think about this - there are probably 100,000 key in hand properties in prime locations on the Costas, ready for careful inspection and securing on the back of a negotiated discount price. There are insider experts who can meet tempted buyers at the airports of Barcelona, Alicante, Murcia and Malaga and Gibraltar and reveal their whereabouts…