Surplus housing in Spain: promotors turn to government for help

Construction Companies ask government for help with getting rid of surplus housing stock

Housing prices continue falling in Spain and although there is demand for around 320,000 new houses annually this does not seem to affect the number of surplus houses which is currently estimated to be 700,000, something which construction companies have called ‘socially inadmissible’ and have led them to call for efficient measures such as subsidising properties for rent.

An article which appears in the latest edition of Asprima, a magazine which represents the interests of the association of Construction Companies from Madrid, asks the government to help clear the surplus housing stock as quickly as possible.

Eighteen months following the start of the global economic crisis construction companies have criticised the government for introducing too few initiatives which have not, in their opinion, worked given the progressive growth in the number of unemployed and the lack of availability of credit.

They consider that the way to generate wealth and employment is to make the housing sector more dynamic and to clear the current surplus of housing stock.

A spokesperson for the construction sector, José Miguel Galindo, said that ‘the sector was in a paradoxical situation with a high social and financial cost that could be met if economic resources which are currently paralyzed were used to implement efficient housing policies’.

Construction companies have asked the government for public help which could be measured according to the profitability of renting and the financial cost of paying off the debt. They believe that this help should be used to subsidise a third of the cost of renting and a third of the cost of a loan to a property owner during a specified period. By this method they believe that financial entities would have the repayment of their loans to developers guaranteed.