Costa Blanca building industry paralysed by recession

In a report published last week by the Official College of Surveyors and Architects of Alicante it was confirmed that activity in the construction sector had come to a virtual standstill in Alicante with a fall by 74% in the start of new building projects compared to 2008 (8,103 building permits compared to the 31,655 granted in 2007). Moreover, 700 of the 1,565 building projects that were begun in 2008 have now been stopped.

This slump in construction has no precedent in the Costa Blanca and although a slow down began at the end of 2004 nobody expected the present crash. The decrease in the housing market in Alicante is the biggest in Spain and is 14 points more than the average for the whole country which was saw a fall of 60% in 2008.

Out of 366,038 new houses and flats built in the province of Alicante since the start of 2000, only 8,103 were in 2008 a year in which the figure for completed building projects was not very positive either: 25,158, when two years previously – the normal amount of time to develop a project – 48,133 had begun (2006).

The fall of 74% in the start of new projects in 2008 is even worse than it first appears due to the fact that this fall is in relation to figures for 2007 which were also negative with a fall of 34% having being registered.

According to the College of Surveyors and Architects of Alicante the figures reveal that the housing sector is suffering its worst moment ever recorded.

The report which was published yesterday also reveals that there are much fewer building projects currently underway. September 2008 was the worst month in terms of new building permits granted in Alicante – 283. In the month of July 2004 at the height of the building boom, 6,884 permits were granted.

According to the College, currently all efforts are aimed at getting rid of surplus stock, refinancing debts or reducing the workforce.

The excess housing stock in Alicante is currently believed to be around 40,000 a number. Solutions to the present situation are complicated by the fact that banks and building societies are reluctant to grant mortgages to potential buyers.

Source: Diario Informacion