Demolition of houses on Spanish coastline

Illegal homes along the Cantabrian coast to be demolished today

The first illegal houses which had been ordered to be demolished by the courts 15 years ago started to be knocked down today. The buildings which are located in the area La playa de La Arena de Arnuero began to be demolished at 7 am this morning.

The buildings which are being knocked down belong to the second phase of the housing development of la playa de la Arena which has 144 apartments in total all of which have been ordered to be knocked down for being illegal under Spanish law.

Although the demolition work is now underway a small group of protestors has gathered at the site wearing yellow t-shirts with the slogan ‘vicitims’ written on them with banners reading ‘144 families - victims of the building mafia’.

The demolition work on the buildings is taking place 15 years after a judge first ordered them to be knocked down. Following this date around a thousand houses have been declared illegal by courts around Spain.

Spanish property markets sales suffer second biggest fall

House sales suffer their second biggest fall to date with a drop of 37.5% in February

According to figures published by the Spanish National Institute for Statistics (INE) house sales for February 2009 suffered their second biggest fall ever recorded with a drop of 37.5%. During the month of February 34.669 transactions were recorded which is the second lowest figure on record. Moreover, these figures show that house sales are continuing their downward spiral at a fast pace.

Following an end of year overall fall of 26% recorded at the close of 2008 the number of house sales in January quickly dispelled any optimism in the property market. The figures for January 2009 saw the biggest fall in house sales ever recorded with a drop of 38.6%, an identical figure to that recorded in March 2008.

Again the biggest fall in house sales has been recorded for ‘used’ houses with a drop in sales of 45.2% (15,642 transactions). The fall in new housing was significantly lower at 29.3% (19,027 transactions). Out of all house sales recorded for February 2009 private house sales fell by 40% (30,822 transactions ) whereas subsidised housing sales fell by just 6.6% (3,847 transactions).

Property prices in Spain still falling

Spanish property prices fall by 9.7% in March

According to the index of Spanish Property Prices compiled by the property evaluators TINSA, the price of private housing in Spain fell by 9.7% in March compared to the same period for 2008. This means that properties are now valued at prices similar to those for 2006. If prices today are compared to the peak of the property boom in 2007 they have fallen even further by 11.5%.

Prices have fallen the most in Mediterranean coastal areas where the average fall in prices is estimated to be around 11.5%.

Prices have also suffered in large cities where the value of property fell by 10.2% in the first quarter of 2008. This means that prices have fallen by more than 10% since they started to fall in February 2008.

Below average falls in property prices have been registered in metropolitan areas (9.6%) followed by the fall of 8.9% in all other smaller municipalities and the fall of 8.3% in the Balearic and Canary Islands.

The highest falls in prices which have been registered since prices peaked in 2007 are in Mediterranean areas (16%), 12.6% in metropolitan areas and in the capitals of provinces and 12.3% in bigger cities.

Surplus housing in Spain: promotors turn to government for help

Construction Companies ask government for help with getting rid of surplus housing stock

Housing prices continue falling in Spain and although there is demand for around 320,000 new houses annually this does not seem to affect the number of surplus houses which is currently estimated to be 700,000, something which construction companies have called ‘socially inadmissible’ and have led them to call for efficient measures such as subsidising properties for rent.

An article which appears in the latest edition of Asprima, a magazine which represents the interests of the association of Construction Companies from Madrid, asks the government to help clear the surplus housing stock as quickly as possible.

Eighteen months following the start of the global economic crisis construction companies have criticised the government for introducing too few initiatives which have not, in their opinion, worked given the progressive growth in the number of unemployed and the lack of availability of credit. They consider that the way to generate wealth and employment is to make the housing sector more dynamic and to clear the current surplus of housing stock.

A spokesperson for the construction sector, José Miguel Galindo, said that ‘the sector was in a paradoxical situation with a high social and financial cost that could be met if economic resources which are currently paralyzed were used to implement efficient housing policies’.

Construction companies have asked the government for public help which could be measured according to the profitability of renting and the financial cost of paying off the debt. They believe that this help should be used to subsidise a third of the cost of renting and a third of the cost of a loan to a property owner during a specified period. By this method they believe that financial entities would have the repayment of their loans to developers guaranteed.