The Pain In Spain - It Just Goes On

I’m sometimes accused of having a downer on Spain and its apparently never-ending housing slump. In fact, I simply feel its problems are under-reported. By seeing what is happening there, we get at least some comfort that UK problems are really not that bad.

Here are the latest figures, which show the country’s problems are by no means over - and perhaps not even over the worst:

Some 257,443 new homes were completed in 2010, down 33% on 2009 and less than half the number of completions from the ‘boom years’ of 2205 and 2006 - a positive spin on this is that at least the country’s estimated one million over-supply may be dropping;

Eurostat, the EU statistics agency, says Spanish construction output collapsed 43% in January 2011 - across the rest of the EU, the average annual fall was under 5%;

Mark Stucklin, a Barcelona-resident Briton who analyses the Spanish market, says building land sales in Spain hit a record low of 3.9 billion Euros in 2010 - six years earlier the figure was 23 billion Euros;

Land prices are also down heavily, by more than 50% - bad news for the banks, which own an estimated 20 billion Euros of land - much of it repossessed from developers now in administration;

The scandal of Spain’s “illegal homes” continues - it simply does not get much publicity in the UK now. The latest revelation, this month, is that 12,697 homes were declared to have illegal status in the just one area alone, the Almanzora Valley in south east Spain, popular with holiday home buyers. What will happen to them is not yet known.

Depressing? Of course - what is perhaps amazing is that this ongoing housing crash and the concurrent scandals over corruption and allegedly illegal building, receive so little coverage these days.

Apologists issue press releases crammed with euphemistic sentiments promising imminent improvements in the market. Well, like stopped clocks, they turn out to be correct sooner or later.

But for the moment, no matter what is said, the pain in Spain remains firmly in the housing and construction business.

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