Spain: Housing market remains in free fall
January 31, 2013
In November, the Spanish Board of Architects (Colegio de Arquitectos Tecnicos) granted 3,106 new construction permits, according to data published by the Ministry of Public Works (Ministerio de Fomento). The figure was down from the 3,184 permits approved in October. That said, on an annual basis permits declined 32.4%, adding to the 45.9% fall recorded in October.
As a result of the monthly figure, the moving 3-month sum totalled 9,450 permits in November, which represents a 48.5% decline over the same period last year and marks a new record low, indicating that the housing market remains depressed. At the current level, permits are only a fraction of the number given during the peak in the July-September period of 2006, when 268,266 permits were granted.
In addition, home prices continue to moderate. The general index of housing prices produced by the Ministry of Public Works dropped 10.0% year-on-year in the fourth quarter, which marked a deterioration compared to the 9.5% decline observed in the third quarter. The price per square metre fell to EUR 1,531 in Q4, which is 27.1% below the peak of EUR 2,101 per square metre recorded in Q1 2008. The housing market should continue to adjust as deepening recession and widespread unemployment continues to erode consumption and investment capacity.