Lanzarote Builders Blog

The Spanish property market was incorrectly portrayed as melting down after the share price correction on the Spanish stock market. In reality, the overall market is not falling, though some regional markets are faring better than others. But the stock market jolt has help focus people’s attention on the serious imbalances affecting Spain’s housing market. The big risk to the market comes from over-provision, as Spanish developers build several hundred thousand more properties per year than the market needs. This oversupply is partly due to years of inappropriately low interest rates for Spain once in the EUM. With the Spanish economy now over-dependent upon the housing sector for economic growth and employment, there is a risk that a much-needed fall in housing starts will bring about a construction-lead recession in Spain. If this happens, demand for holiday homes will be hit hard, and house prices will fall in many areas. But even in this worst-case scenario, attractive properties in desirable locations with foreign appeal should hold their value, and recover quickly as economic conditions improve. With the Spanish economy growing at close to 4% – one of the highest rates in the developed world – and with forecast growth of 3.7% in 2007, and 3.4% in 2008, it is difficult to imagine a construction-lead recession at present. Without a recession, the Spanish housing market is more likely to stagnate over the next few years than fall.

Always build with a license because the threat of demolition hangs over 100,000 Spanish properties built without planning permission, or with an invalid building license, according to a recent article in the Spanish daily ‘El Mundo’. Calls for a tougher line to be taken with illegally built homes in Spain are increasing, and Antonio Vercher – the head official in charge of real estate and environmental investigations – is quoted as saying that, “we need to rethink this issue, and find effective new solutions.”

In parts of Spain, for example Murcia, foreign buyers are being mis-sold properties that have a special ‘tourist apartment’ classification. Tourist apartments cannot be used as residential properties, and should be cheaper than ordinary apartments. Some Spanish developers and agents are selling tourist apartments as ordinary apartments, taking advantage of the fact that English-speaking buyers are not well informed, and can be easily tricked into overpaying for properties that are use-restricted. To be on the safe side, buyers need to ask their lawyers to double-check this issue before proceeding.

Welcome to Natura Design Blog. This is our first post. In the next few weaks we will be posting general information on building and investing in the Canary Islands. Feel free to add your comments to these posts.

Clients can find a link to their ongoing construction projects in the side navigation under “client Updates” this will give you full access to the ongoing progress of your construction projects. We give regular updates with lots of useful  information on the building methods we use.