The Spanish Property Market; End of 2007 – Beginning of 2008

20 February 2008

2007 did not bring good results; Building of housing through free financing, which constitutes 90% of the property market, reduced significantly in 2007.

Whilst in 2006 a record number of 912,000 construction permits for homes were authorized in Spain, in 2007 this figure was reduced to approximately 550,000 (Source: Spanish economic tendencies for 2007/2008). In 2008 this figure may reduce even further and return the Spanish property market for new homes back to a reasonable size more comparable with other European countries. After 9 years, the construction of homes has suffered a large recession.

The situation in the business sector however is very different. Space is scare for well-sited office buildings both in Madrid and in Barcelona. The construction of four office towers on the site of the old sports ground of Real Madrid in the North of the city (a high-profile project from an architectural point of view as well as the large scale of the construction) is not yet completed and promises high marketing prices.

In spite of this, there is still hope in 2008 in the flourishing civil construction, the ongoing development of the high speed train lines, the road network and the energy industry.

The recent development of commercial centres is not expected to come to an end either; according to data from Alimarket and Aguirre Newman, there currently exist approximately 80 large business projects with a total surface area of two million metres squared, and a construction value of 5 million Euros, due to be finalized by the beginning of 2009.

For further information, please contact Stefan Meyer: smeyer@mmmm.es