Spain: Housing permits tumble in March
May 31, 2011
In March, the Spanish Board of Architects (Colegio de Arquitectos Tecnicos) granted 6,840 construction permits, according to data published by the Ministry of Public Works (Ministerio de Fomento), which is down from the 8,190 permits approved in February. The monthly drop in housing permits proved last month's improvement to be temporary and confirms the notion that the housing market remains in freefall, as permits plummeted 29.1% over the previous year. The moving 3-month sum totalled 21,807 permits in the period ending in March, which represented a 7.4% drop compared to the 23,559 permits approved in the same period of the previous year. At the current level, permits are only a fraction of the peak of 268,266 granted in the July-September period of 2006. Moreover, the Bank of Spain anticipates housing prices to fall further. At a real estate conference on 1 June, the general director of the research department stated that the adjustment will be prolonged until the end of 2012 or even the beginning of 2013. The Bank's study found that prices have dropped 20% in real terms since the first quarter of 2008 and are likely to fall a further 10% in the next two years.