Spain: Housing market continues to deteriorate
October 31, 2011
In August, the Spanish Board of Architects (Colegio de Arquitectos Tecnicos) granted 4,352 construction permits, according to data published by the Ministry of Public Works (Ministerio de Fomento), which was down from the 7,218 permits approved in July. On an annual basis, permits dropped 13.1%, which confirmed the feeble state of the housing market. The moving 3-month sum totalled 20,131 permits in the period ending in August, which represented a 11.5% decrease over the same period last year. At the current level, permits are only a fraction of the number granted during the peak in the July-September period of 2006, when 268,266 permits were approved. In addition, housing prices continue to decline. The general index of housing prices, produced by the Ministry of Public Works, dropped 5.6% year-on-year in the third quarter of 2011, which was faster than the 5.2% decline observed in the previous quarter. At the current level, the price per square metre reached EUR 1,730 in Q3 2011, which was 17.7% below the peak of EUR 2,101 per square metre observed in Q1 2008.