The Spanish Ministry of Housing announced a 12% increase in the number of unsold homes in 2009. There is no surprise there as we all know that many of the newer, less well placed developments were hugely under-subscribed.
The total number stood at 688,044 in 2009 and will obviously increase substantially as more construction sites near completion, taking unsold stock levels to over 1,000,000 homes. The interesting point here is that there is a massive dis-parity in where these unsold properties are geographically located, with 61% of the languishing properties in coastal areas.
A spokesperson from the Ministry of Housing mentioned that the rates of these homes being sold will be severely disproportionate, given that the majority of the glut needs foreign holiday home buyers as opposed to domestic purchasers. How will this impact the Costa Del Sol property market?
Well, obviously the news isn´t positive, as such dramatic oversupply will adversely impact prices within certain localised areas and will drive asking prices close to the completed empty developments down.
It is worth mentioning that the increased number of unsold homes is markedly less than in the previous years, with figures going up by as much as 40% in some years. In order to avoid the implications that the above may present, I do think that choosing a more established area will help safeguard against decreases in price.
Conversely if you are looking for a cheap holiday home and don´t neccessarily care too much about being in a prime or mature location, you will have really heavy bargaining power, as developers get more and more desparate to unload stock.
Michelangelo quotes