The high demand for new homes and the lack of new construction continue to put pressure on prices in many markets across Spain, despite the current slowdown in property sales and mortgage approvals. According to the Ministry of Transport, Mobility, and Urban Agenda, approximately 50,000 homes were initiated in the first six months of this year, the highest number since 2019 before the arrival of the Covid-19 pandemic.
AndalucĂa led in terms of the number of homes initiated in the first half of 2023, with almost 12,000 units, followed by the Community of Madrid with 7,255, Catalonia with 6,391, and the Valencian Community with 6,065. Additionally, during the same period, a total of 40,707 homes were completed, a 5% increase compared to the previous year, marking the highest figure since 2021.
Looking at the historical data, the peak of new home construction in Spain was reached in 2006 when 664,923 units were initiated during the real estate boom. Between 2004 and 2007, the number of new homes exceeded 600,000 units due to the overheating of the market. On the other hand, the year with the lowest number of new homes initiated was 2013, following the burst of the housing bubble, with only 29,232 free homes started.
Despite some progress in home construction, the shortage of new properties continues to present a challenge for the real estate market in Spain. The lack of supply relative to the demand has contributed to the upward pressure on prices, making it difficult for potential buyers to find affordable options.
Sources:
- Ministry of Transport, Mobility, and Urban Agenda.