I’M often asked how many empty homes there are on the Costa del Sol and, to be honest, I have no idea at all. What I do know, however, is there are fewer than many people think, particularly in the most in-demand areas.
Ever since the ‘la crisis’ hit Spain’s real-estate market in 2008, professional professionals, talk-radio pundits, and the man and woman in the street have questioned how many properties stand empty across Spain and, especially, on the Costa del Sol. The simple answer is nobody knows, but that doesn’t stop some people, who should really know better, from guesstimating wildly…
For instance, according to a headline-grabbing article this February in the UK’s The Guardian newspaper, based on 2011 census data, there are more than 3.4 million empty homes in Spain. On the other hand, according to a report published in August by the Instituto de Práctica Empresaria (IPE), there are just 652,000 houses where no-one lives across the nation, down from a maximum of close to a million homes back in 2010.
White elephants like Valdeluz – the $1.6-billion ‘new town’ in Guadalajara, an hour from Madrid, that broke ground in 2006 to house 30,000 people and where less than 2,500 live – linger in the interior, delivered at the height of the crisis in undeveloped suburban areas.
Skeletons of castles, built from sand and speculative dreams, still litter the coastline on both sides of Malaga in areas that should never have received planning permission in the first place. But my own experience and the latest research suggest there may not be as many empty homes on the Costa as some may think.
Last month, real-estate consultancy Aguirre Newman released their Residential Market Report for the Costa del Sol 2014, analysing 266 new-build developments of apartments and chalets along the coast and found 207 were actively selling, 33 had sold out during 2013, and just 26 had ground to a halt during development or were not being sold. Of these, more than 40% were being sold by financial institutions.
They also noted the total of new homes for sale on the Costa in 2014 fell to 16,500, around 18% less than the previous year. At the same time, four new developments were launched last year, the clearest sign yet that builders, and the banks backing them, not only believe things are going to get better, but that there is also a market for more new homes. In the previous three years, no new building permits were issued.
What the study also brought home is the existence of two parallel housing markets in Spain: the still depressed Spanish market, made up of local buyers, the vast majority of whom rely on financing from banks; and the increasingly buoyant overseas market, where many purchasers – up to 90%, according to the report – are cash buyers who don’t need a mortgage.
Now, I’m not trying to suggest there’s no longer empty homes, some for sale and others unfinished, on the Costa del Sol. But they are, for the most part, in areas that remain underdeveloped. They will take time to sell, but not because the market is weak. Simply put, most buyers would not live there even if you paid them.
Once the stock of fairly-priced, well-located homes in the market have sold, there will be a distinct shortage of quality property to buy in decent areas. So, it shouldn’t be too long before the press starts writing about the next boom and encourages readers ‘now is the time’ to buy a place in the sun.