Spain's property market is benefitting from a decrease in new home construction in 2010. A decrease of 33 percent has been reported from 2009 to 2010, according to the latest statistics from the Government.
A 60 percent decrease in Spain property construction completions have occurred from 641,419 new homes in 2007 to 257,443 new homes in 2010. This is largely due to a decrease in demand for residential properties.
Planning approvals have also declined according to research, as they hit an all-time low of 91,662 last year. This is an indication that less and less homes will be coming onto the market for the short to medium future.
Spain has been experiencing a great oversupply of homes across many regions of the country, so a slowing down in property construction was necessary to balance things out. Since Spain’s property market peaked in late 2006, property prices have decreased by up to 60 percent.
There are around one million unsold homes on the market in Spain currently. Despite the large number of homes, some house builders, such as Polaris World, are still planning on building new homes this year. Property experts do not believe that this is a good idea, as the market is best when supply vs. demand is more balanced.
With the large number of unsold properties at affordable prices, the amount of overseas investors has increased. Investors are very interested in capitalizing on the oversupply to fatten their investment portfolios in the hopes of high returns on their investments in the years to come.
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