The Executive’s decision to suspend non-essential economic activities across the whole country has put a stop to the construction of thousands of new homes. The Government measure to prevent the expansion of Covid-19, which entered into force on 30 March and which will be in effect until 9 April, has forced workers to down tools on 4,809 developments and 131,471 homes across Spain.
According to data compiled by the Brainsre Big Data real estate platform, in Cataluña, work on 761 developments and 16,654 homes has been paralysed, due to the cessation of construction activity. More than 50% of the suspended homes form part of large developments comprising more than 50 units, specifically, 86 new developments with 8,503 units.
Of the more than 16,600 new homes in the region that the pandemic has left on standby, work on most started last year, specifically, 10,075 units, representing 60.5% of the total. Meanwhile, construction of 3,752 began in 2018 and work on the rest, 2,827, was started this year.
The paralysis puts the delivery deadlines set by the companies at risk. In fact, according to the plans of the various property developers, almost 49% of the homes were due to be finished this year, equivalent to more than 8,100 units. Likewise, more than 7,600 homes were scheduled to be completed next year and almost 860 in 2022. “Nearly half of the homes under construction were due to be completed this year, a percentage that will inevitably diminish in favour of 2021. A total of 772 homes distributed across 65 developments were estimated to be completed in April of this year in Cataluña. It is looking increasingly unlikely that these, and many others, will be handing over the keys on time.” says Antonio Ramudo, RE Data Scientist at Brainsre.
By type, 86% of the homes on standby are made up of multi-family homes, which correspond to more than 14,300 units. Meanwhile, 9% corresponds to single-family homes and 4% to social housing properties.
Barcelona, the region worst affected by the shutdown
Of the more than 16,600 new-build homes on standby due to the coronavirus, Barcelona is the worst affected province since 82% of the total are located there – equivalent to more than 13,700 homes and 572 developments -. Tarragona accounts for 9%, Girona 6% and Lleida the remaining 3%, according to data analysed by the Brainsre platform.
By municipality, Barcelona is the worst hit, with more than 2,600 homes on hold. It is followed by Badalona with 1,550 homes, L’Hospitalet de Llobregat with 1,300 homes and Sabadell with 1,200 homes.
It should be noted that up to 167 of Cataluña’s 947 municipalities have seen new residential construction projects suspended, in other words, 18% of the total.
Which property developers are most affected by the shutdown?
Stoneweg Living is the property developer most affected by the break in activity in Cataluña, due in part to two of its star projects: Marina Living, a development comprising more than 400 homes – although currently there are just 284 under construction – located in the Badalona Marina, and which hit the headlines last year when it was partially sold to Axa under a build-to-rent formula; and Prat de la Riba Living, a development comprising 276 homes in Hospitalet de Llobregat currently being marketed by Volumetric.
The second most affected property developer is Kronos Homes, which has two large projects in the Badalona Marina, where it has 400 homes on hold. The first is called H2O and comprises 252 homes due to be handed over in June this year. The second project, O12, comprises 148 beachfront homes on which building work began at the end of last year. In addition to those two projects, Kronos Homes is working on an ambitious 318-home development in Tarragona, The Kube, construction of which was due to start in early March; and Waves, a development in Calafell (Tarragona) that contains 202 homes and which has been underway since late 2019 on an old WIP site.
In this sense, the largest residential project of those paralysed in Cataluña is CORPS’s Barcelona Sants development, comprising 420 rental homes. Work began there at the end of 2019 and the keys are due to be delivered by the end of 2021 or in early 2022.