The Government’s decision to restrict all non-essential economic activities put a stop to the construction of thousands of new homes that were being built across Spain at that point.
Specifically, according to data compiled by the Brainsre Big Data real estate platform, work on 4,809 developments and 131,471 homes was paralysed due to the cessation of construction activity. “The data includes all of the building work endorsed by the College of Quantity Surveyors that had not been completed as of 30 March,” explains Antonio Ramudo, RE Data Scientist at Brainsre.
“On average, construction of a residential development takes around 24 months, and so this measure directly affects all permits granted within the last 2 years, which means a total of 206,000 homes. In 2019, 106,000 new home permits were granted – a figure that represented just 12% of the number of new permits approved in 2006 – and in 2018, 100,000 permits. In addition, permits and new projects scheduled to start in 2020 should be considered, which corresponds to an additional pool of 100,000 homes”, says Jorge Laguna, Director of Business Intelligence at Colliers International.
Of the more than 131,000 homes that the coronavirus has forced onto stand-by, most belong to projects that were approved last year, specifically 59% of the total, according to data from Brainsre. Meanwhile, 24% of the projects were started in 2018. Finally, the licences for 22,255 homes were obtained during the first three months of 2020.
The lockdown represented a major setback for the buyers of these homes, who may see delivery deadlines not being met. In this way, of the almost 131,500 units that were being built before the lockdown, almost 57,000 had an estimated delivery date this year (2020), whilst 51% were scheduled to be completed in 2021. “Up to 43% of these homes were expected to be completed this year, a percentage that will surely be reduced, as deliveries are pushed back until 2021. And of those, almost 4,500 homes were due to be completed in April 2020. These projects, together with several others, are in serious jeopardy of overrunning the deadlines for the delivery of their keys”, comments Brainsre’s RE Data Scientist.
By type of dwelling, 58% of the developments put on hold at this time comprise multi-family homes in their entirety, 36% are single-family dwellings and 8% are developments dedicated entirely to social housing.
Madrid, the region most affected by the lockdown
Of the more than 131,000 new build homes halted by Covid-19, Madrid was the most affected autonomous region, with 26,713 homes on hold, followed closely by Andalucía with 26,195 units, half of which are located in the province of Malaga. Next in the ranking are Cataluña and the Community of Valencia, with 16,654 and 15,779 suspended homes each. Those four communities alone together account for 65% of the residential supply that was under construction in Spain until the activity was forced to cease.
The País Vasco, where large companies such as Neinor Homes and Amenabar are highly active, saw the construction suspended of almost 9,200 homes due to Covid-19. In total, more than 300 developments were underway there until last Monday. Work was also in progress in Castilla León and Aragón on almost 6,500 and 4,850 homes, respectively, before the decree the issued.
In the Balearic and Canary Islands, the projects affected by the cessation of construction were also numerous, with almost 4,000 homes under construction in each region.
At the opposite end of the spectrum were Ceuta and Melilla, where the cessation of activity has affected just 5 and 9 projects, respectively, containing a total of 72 and 141 units. La Rioja is the third least affected region in terms of property development activity with just 480 new build homes under construction there.
By province, Madrid, whose suspended home pool accounts for 20% of the national total, leads the list, followed by Barcelona and Malaga. Those three provinces are home to 40% of the new residential stock, according to Brainsre’s RE Data Scientist.
The Costa del Sol, at the same level as Madrid.
Up to 850 Spanish municipalities, 10% of the total, have halted work on new residential developments, according to data compiled by Brainsre.
At the head, Madrid capital, with almost 200 construction projects, comprising some 10,280 homes in total, more than the entire province of Alicante (8,812) or Valencia (6,381). However, Valencia capital is second in the municipal ranking in terms of construction, with more than 4,500 homes underway during the days before activity was shut down. In third place is Zaragoza, where work on almost 4,000 homes across almost 90 projects has been suspended.
In terms of the municipalities on the Costa del Sol, such as Málaga, Fuengirola, Mijas, Estepona and Vélez-Málaga, there were almost as many homes under construction there as in the municipality of Madrid. In particular, those towns reveal the importance of second homes within the market for new developments. For example, in Málaga there were 3,436 homes under construction and in Estepona almost 2,700.
Finally, the Madrilenian towns of Rivas, Torrejón de Ardoz, Getafe and Valdemoro were also home to a great deal of development activity, with more than 1,000 homes under construction in each one until Decree 10/2020 was issued.
Read the original article in Spanish.