The existing house stock will be sold out in two years.

The housing bubble is about to disappear in this part of Spain after ten years from the collapse in the construction sector. A "reverse bubble" is about to appear in terms of demand, according to the Murcia College of Architects. It will be two years at the most, warns our dean, Rafael Pardo Prefasi. 

Two years is the time that will take to sell off the existing stock of homes on the market at the moment.

The current rate of construction is not even one tenth of what is necessary to meet the needs derived from the population growth and the demand from the foreign market.

A year ago there were still 23,500 unsold homes in the Murcia Region, according to estimates by the Ministry of Development, coming from the 'brick fever', most are in areas that are unattractive to the urban population, such as suburbs, rural municipalities and tourist resorts. However, aggressive offers from banks, such as the Sareb and real estate companies (with prices well below € 100,000) are being expedited.

 

Between a year and a half, to two years,

 The existing stock will no longer be on the market and such a void will not be filled if construction activity does not take off as soon as possible, "says Rafael Pardo. According to data from the Federation of Employers of the Construction of Murcia (Frecom), 13,659 homes were sold last year, between part of the aforementioned surplus and the little that is newly built.

The problem is that the sector is devastated in the literal sense of the word. If before the crisis it constituted 12% of the regional GDP, at the moment does not reach 5.45%, indicates the president of Frecom, Luis Fernández Mula. If there were then nine hundred construction companies, today we can hardly reach the two hundred mark. "Almost 80% of the business fabric has been lost," he laments.

 

Before the crash.

Last year, 1,461 homes were completed (11% more than the previous year, thanks to the economic recovery) and projects were planned to build another 942, which will take about two years to be finished. To get an idea of the crash, in 2007 34,009 homes were finished and another 42,181 were on plans.

 

Although the peak of the recession was reached in 2014 (with 988 built homes), the dean of the College of Architects believes that revival of the real estate market is proving too slow to respond to growing demand. In fact, the activity is currently concentrated on the coast. "Construction is taking place now is in San Pedro del Pinatar and San Javier, not in Murcia, Cartagena or Lorca," says Rafael Pardo. One of every three homes built in the Region are vacation homes and are sold predominantly to Britons, Germans and Belgians, according to the Ministry of Public Works.

 

Those who survived.

Meanwhile, the surviving property developers are building apartments, duplexes and luxury villas out of reach for most pockets. "There are hardly any blocks of flats in our cities. Right now, for example, it is very difficult to find a new flat of three or four rooms in Murcia, city" reports the dean of the College of Architects.

According to the calculations from the Construction White Paper, prepared by the Department of Development in collaboration with the agents from this sector, the annual demand for housing in the Region is between 18,000 and 20,000 (an average of 19,177, to be exact) . "It is more or less the pace of building before the boom of 2006 and 2007. And we must take into account that now there are many young people wanting to emancipate themselves," says Rafael Pardo.

In his opinion, if the construction activity does not multiply itself in the short term by ten prices will rise "between 20% and 30%" and will not stabilise before five years. "Home to be let will also become more expensive due to the difficulty of acquiring new housing," he adds.

 

A plea to the Central Government.

For the Ministry of Development, the ideal offer of the real estate market should not fall from 15,334 new homes each year to maintain prices and stimulate the construction activity. However, the Regional White Paper on housing states that 'the slow and difficult reactivation of the sector, as well as the length of  times for obtaining planning permission on new land and housing production, may lead to the lack of adequate supply in certain areas '.

 

To avoid this, some obstacles must be removed, according to the dean of the College of Architects. Approving a new Housing Plan to stimulates the construction of public housing (only 87 were built last year), and rehabilitation of buildings (only 863 were carried out in 2016) to revitalise the second-hand market; Above all, in urban centres. "It would be a first stimulus," he says. However, the new plan will not come into force until 2018.