According to official figures from Fomento (the Ministry of Public Works) there were just 33,869 residential planning approvals in Spain last year. This is an incredibly low figure. It is not only 23pc less than the 44,162 housing starts of 2012; in fact, it is the lowest figure since the current data series began. Compared to the 2006 peak of Spain’s building boom, when planning approvals for new homes hit 865,561 in one year alone, more than the UK, France, and Germany combined, planning approvals have collapsed by 95pc.
Due to the glut of new homes on the market, plus the lack of financing available to developers, it is difficult to imagine any significant recovery in home building in the near future. What is not difficult to imagine, however, is a shortage, in the next few years, of the kind of new homes that people do want, in the places they want them. So if you already own one of these, this is good news for your investment. On the other hand, if you are currently looking to buy a property in a sought-after location, I am afraid you will soon have to face tough competition as the market picks up speed again!