Drop in sale of new housing doubled in January
According to figures published by the Spanish National Institute for Statistics house sales dropped by 38.6% in January compared to the same month last year. During January only 37,931 transactions were recorded which means that the last three months have seen sales drop to historic levels although sales were up by 17% compared to the figures for December 2008 – the worst since the crash in the housing market. Despite this slight improvement the sales of new housing has continued to fall compared to a year ago and the decrease in sales has almost doubled from 14% recorded at the end of 2008 to 29.1% in January 2009.
These figures are significant because they signal that the crisis in the housing market is now affecting new housing as much as used housing. Sales of used housing fell by 47.2% in January 2009 which is a fall of 7 points more compared to December 2008.
The difficulty of selling new housing despite reductions in prices has led to many construction companies to stop current building projects.
According to sources from the sector no new projects have been started for 2 months. In fact it is estimated that there are around a million unsold new houses and flats, a figure which is expected to rise even further. The sale of private housing has fallen by 40.9% whereas the fall in the sale of subsidised housing has fallen more moderately by 12.9%.
The fall in sales and the construction of new housing has also had a knock on effect on the price of urban land which has up to now been the most expensive aspect of new building projects. The Housing Ministry published figures today that show that the price of a square metre of land fell by 10.5% in the last quarter of 2008 to 248 euros compared to the same period in 2007. This fall is in line with the fall of 9% in the price of private housing according to the property evaluators Tinsa.
Compared to the last quarter of 2007 the price of urban land has fallen the least in areas which have more than 50,000 inhabitants (1.2% to 632.5 euros). However prices have fallen more in areas with between 5000 and 10,000 inhabitants (6.3% to 191.4 euros) and even more in areas with between 1000 and 5000 inhabitants (11.7% to 129.3 euros). However, prices have dropped most significantly in areas with between 10,000 and 50,000 inhabitants with a fall of 14.6% to 278.7 euros.
At the close of last year the price of urban land was most expensive in areas with more than 50,000 inhabitants, namely Madrid (1,081 euros), San Sebastián (996.9 euros), Alava (989.1 euros) and Barcelona (915.8 euros). On the other hand the lowest price of land was recorded in Jaén (268.
3 euros), Segovia (387.6 euros) and Cáceres (395.6 euros).