Words: Ashley Rigg
Published: 29th June 2011
85% of Spanish property glut is holiday homes
Over eighty five percent of newly-built unoccupied properties in Spain are located in coastal areas, according to a new report from Catalunya Caixa, a savings bank.
The bank estimates there are in excess of 800,000 such properties in the country, of which 722,500 are in coastal locations. The glut represents 3.2% of Spain’s total housing stock.
Worse still, the glut is expected to rise over the next two years as new units come onto the market and a combination of economic and demographic factors take their toll on property demand.
A million unsold homes by 2012
By the end of the 2012, the bank estimates the housing glut could move past the one million mark with 150,000 new homes coming onto the market this year and 125,000 next. According to the report, it is unlikely the rate of household formation can keep up with seamlessly never-ending increase in supply.
Comment
“Spanish coastal areas” represent a broad spectrum of local markets. There was surprising news this week of property prices rising in Ibiza for the first time since the crisis began. Limited supply and an internationally recognized brand have helped protect the island from the worst ravages of the downturn.
The most likely conclusion of Catalunya Caixa’s report is that there will be a continuing polarization between “prime” and “sub-prime” housing markets with the former being beach-front locations and front-line property in established destinations.
The difficulty for agents will be persuading potential buyers to pay the market prices for good property in prime locations when the internet will become even more cluttered with cut-price property in housing ghettos that may eventually have to be demolished.
Source: Global edge
User Comments
The media always harp on about how many properties are for sale in Spain, unfortunately there are approximately the same amount for sale in the UK but who do we hear about--Spain. It's the same with prices we are told that prices have dropped by up to 50% what the media forget is over the last 5 years the Euro has dropped by 25% so prices can go down by 25% and the UK vendor will still get back the equivalent of what they paid less taxes. Perhaps they can use this angle to help sell properties, remember everything has its price but not give-away. There was atime when the media needed us for advertising but the internet and property portals have now taken over.
Des Rowson,
DLR Properties Overseas
Your last COMMENT paragraph is not incorrect and it hurts the image of our country, there are no "GHETOES" FOR DEMOLITION IN SPAIN
HERMINIO GARCIA,
GRANDES PATRIMONIOS INMOBILIARIOS
Quite right - the glut keeps on getting worse. Trying to get reasonable prices for well located property continues to be very difficult. Buyers expectations are that ALL property is at bargain prices and that almost any offer will be accepted. Recent letters to English language papers are even blaming the AGENT for lower prices! Talk about no win position!
Roy Hayes,
Kasas Royale