Oversupply of properties in Spain expected to fall

Oversupply of properties in Spain expected to fall

The oversupply of homes in Spain will start to be absorbed this year, thanks to rising sales transactions and a reduction in supply, according to a forecast made by Spain's Association of Developers and Constructors (APCE).

If APCE's projection is accurate it would be great news for the fragile Spain property market, which has suffered as a consequence of the glut of unsold homes on the market.

It is estimated that there is an oversupply of in excess of a million properties in Spain, due to a 10 year construction boom which started in 1997. This has had an adverse impact on the market, causing Spanish property prices to tumble by up to 70 per cent across some parts of the country.

Official data shows that Spanish property sales increased by 6.8 per cent last year, something which Jose Manuel Galindo, President of the APCE, reflects upon positively.

Galindo told the Spanish press: “More flats are now being sold then built.”

Galindo expects Spain property sales to increase further, thanks partly to significantly cheaper prices, while new housing starts should remain at an historic low.

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