We architects are the first one to feel the crunch and the first ones to appreciate any improvements in the building industry. I am glad to say that this time we are appreciating an advance in the construction business.
The projects registered at the College of Architects show a recovery of the building sector in the province. After years of drought, the cranes also return to the city of Valencia, with an increase from 53 projects in 2015 to 340 in 2016.
Private funds feed the demand after launching to invest again in housing with the purchase of whole blocks of buildings.
Cranes had not been seen for many years and now there are works for an incipient demand on housing. But beware: although there is a moderate optimism, the stock that remains to be sold is still very large. There is a clear upturn in construction of new homes registered last year.
The figures past to us from the College of Architects, show that 1,035 homes have been built last year in the province of Valencia, 57.7% more than in 2015, when they were 656 only. That total corresponds to 500 buildings, of which 31 are in block (with 522 houses) and 469 single-family houses (513 houses). This is one of the characteristics that define the incipient recovery of the sector: buyers are looking for flats in the city of Valencia and single-family homes in the municipalities.
I can see cranes again!!.
In the city of Valencia, growth has been even more spectacular, although it started from a very modest figure. Of the 53 homes started in 2015, there were 340 in 2016, corresponding to 12 buildings: 10 in blocks (338 homes) and 2 individual family houses. Planning approvals for new urbanisation that were stranded for many years has been taken up and put on its rails again , but the increase does not respond exactly to that, I tend to belief that although investment funds are buying before prices rise more, the big push comes from families that want a new home as there are more people with access to jobs and feel confident to embark into the purchase of a new home, and especially now that banks are not paying any interest on deposits.
12 years of decline.
We have had about 12 years of decline and stagnation and for years we lived on rehabilitating works. In fact, 2015 was the first year of growth since 2006. The construction of housing in the province of Valencia during the year 2015 reversed for the first time from the negative inter-annual growth rate that had been going on for a decade.
We have however to put into some perspective the magnitudes of this increase.
During the hottest point in housing construction in the province of Valencia in the year 2006, 5,025 new developments where at full steam 46,335 new properties were being built. Since then, new construction has sunk to 502 homes and 292 developments registered in 2014. By municipality, last year, apart from the aforementioned 340 homes started in Valencia, 44 were targeted in Oliva, 40 in Aldaia, 31 In Puçol and 30 in San Antonio de Benagéber.
Let’s call it a restrained increase.
According to the figures from the College of Architects, it was in 146 localities where homes were built last year 2016.
We see that growth is very restrictive, and that is good, because it shows a controlled positive change. Regarding investment funds, they are launching the purchase of whole blocks of buildings and are trying to put on its rails some developments that came to abrupt halt in 2006.
The traditional property developer is returning to their traditional role as intermediaries, although they have yet to eliminate housing stock. With some uncertainty in the horizon, there is a changing trend in the construction sector and although there are still some unknown factors one thing is certain, the trend has certainly changed and has changed for better or so we hope.