2023-06-14 02:03:54
He Bank of Spain believes that house prices are unlikely to fall anytime soon. Despite the increase in the cost of credit, the financial supervisor considers that it is foreseeable that the price of housing, in nominal terms, will continue to show “a downward resistance” due to factors such as the favorable financial situation of the different agents in this market, the high costs of construction materials and a shortage of new construction.
Spain’s inability to produce enough new housing to correct the imbalance between supply and demand that the financial supervisor has detected after the recovery of interest from buyers after the pandemic and that has pushed prices up is reported by the relationship between construction and planned homes. According to the study published yesterday by the Bank of Spain «The mismatch between housing supply and demand and its relationship with prices», the volume of homes expected to be produced this year and next represents half of the expected formation of households. Both for this exercise and for the next one number of new construction visas will slightly exceed 100,000. However, the household projection of the National Statistics Institute (INE) points to a figure that it would be around 220,000 in both 2023 and 2024. In this way, if the projections of the INE are met, and given that the supply would be very insufficient to cover the demand, “it is possible to expect a prolongation of the tension [de los precios] in some local markets,” warns the entity headed by Pablo Hernández de Cos.
The Bank of Spain suggests that, in order to speed up the production of new housing and help correct the imbalance between supply and demand, it might be advisable review developable land management procedures so that housing production can respond more quickly to existing needs. The Bank of Spain ensures that, currently, according to the Urban Information System of the Ministry of Transport, Mobility and Urban Agenda (Mitma), with urban information on 65% of Spanish municipalities (covering about 73% and 98 %, respectively, of the territory and the population in Spain), close to 24% of the urban planning dates back less than 1992, while barely 30% date back to 2008. «This underlines the need to review and update the figures of the oldest plans in order to increase the land available for housing production and thus meet the changes and new needs of the demand”, he explains. The number of homes planned in the development areas of said plans (which would approximate the capacity of the land subject to transformation to house new homes) amounts to more than 9.2 million units, of which just over 70% would not have been executed, according to the financial supervisor.
The entity directed by Pablo Hernández de Cos considers that the process that affects the construction of new housing is also very long over time. As he details in his analysis, a relatively long period elapses from the moment the decision is made to promote the construction of a house until it goes on the market. In particular, the land management and development period can often last several years. Additionally, from the time the new construction permit is available for a high-rise residential building until its construction is completed, the usual no less than a year and a half.
#Spain #builds #housing