The road to recovery has been slower than most for the construction sector. As Spain’s economy and its housing market began to find its feet after 2012, it was a true buyer’s market, with low prices in the resale sector particularly attractive, and Spain still suffering from an acute oversupply of unbuilt or unwanted apartments in areas where demand had fallen.
But the past few years have been good for Spain’s real estate sector and, by extension, its construction industry, which has consolidated, matured and slowly but surely regained competitiveness. Some areas of the country are still marred by too much construction, too quickly, but those regions that have been perennially popular with homebuyers have now largely dealt with the overhang of housing.
So much so that new data released this week by Spain’s Ministry of Development has revealed that the number of building licence applications has increased 35% in the space of a year. The data from August shows a 20.2% year-on-year increase, with 3,291 licence requests during that month.
Indeed, the number of requests for building permits has increased every month for the past 17 months, which is a solid indication that Spain’s construction sector has been granted licence to resume building – not at the volumes seen before the crash, but certainly at an encouraging pace designed to meet the returning demands of consumers, both foreign and domestic.
So far in 2016, some 42,869 licences have been granted. While much higher than in 2015, at the same point in 2006 (January to August) that figure was a whopping 911,000 – almost one million new property licences issued in less than nine months.
As history shows, such demand could not last, and the bubble was soon burst. This time around, the entire industry is taking things a lot more slowly… and sensibly.