- Housing Objective: sell 500,000 houses at the end of the year
Spain suffered the biggest fall in the construction sector in the entire European Union in September. The activity contracted by 10% compared to the same month of the previous year, compared to 0.3% that grew in the whole of the Twenty-eight, behind other members such as Slovenia (-8.1%) or France (-2, 6%) The data, offered yesterday by Eurostat , are also not positive when looking at the monthly evolution, since the activity fell by 2.4% compared to August and the country was once again the one with the worst evolution in the EU (+0, 3%), also standing in the tail of the region, only ahead of Sweden (-4.9%) and Romania (-3.4%).
The economic slowdown and the normalization of the real estate market in Spain have begun to make a dent in the brick , after several years of recovery. Just look at the evolution of the last months and the last quarters. For example, between July and September 2019, construction activity contracted 1.7% in the country, compared to 1% that grew the previous quarter.
Industry sources admit that "some weakness" is occurring mainly due to the slowdown in the economy, both globally and nationally. Brussels, in fact, has lowered its growth forecasts for Spanish GDP to 1.9% in 2019, four tenths less than the forecasts published in July.
Along with the cooling of the economy, the other factor behind the bump of construction activity in September is the slowdown in the housing market after several booming years. Sales, for example, fell 12% in the ninth month of the year compared to the same period of 2018, according to the latest INE data, and up to that time, the number of transactions had fallen by 3.2%.
"The sector is experiencing an adaptation of demand and supply," says Marcos Beltrán , general director of the Altamira service and responsible for the Real Estate area. "Although evolution depends on the areas and market niches," he clarifies. There are areas that have not yet recovered from the previous crisis and areas where the tension has caused an almost unattainable price rebound, as in Madrid and Barcelona.
The rental price rises 2.4%
However, the slowdown has also been noted in them. In Barcelona, the number of real estate projects under construction has decreased compared to last year, since the momentum in the promotion of offices registered in recent months has not counteracted the decrease in the residential sector. According to the last report Barcelona from the sky prepared by the consulting firm CBRE , in the Catalan capital, 260 construction and / or rehabilitation projects are counted so far this year compared to 272 registered in 2018, which means a decrease of 4% . In Madrid , meanwhile, the same consultant accounted for 482 projects on the same date, compared to 415 in the previous year.
The price of rental housing in Spain rose 2.4% in October and 3.6% in the interannual variation, placing the average price at 9.81 euros per square meter, according to the latest study by Fotocasa .
By autonomous communities, Madrid and Catalonia (14.82 and 13.84 euros per square meter, respectively) are the most expensive regions to rent a home, followed by the Basque Country, the Balearic Islands and the Canary Islands, with 12.71; 12.49; and 9.89 euros per square meter each.
Navarra, with an increase of 8.2%, is the autonomy that goes up the most in price, while Catalonia is the region that decreases the price the most in October, 0.4% less.
According to the report, the rental price rises in 38 of the 47 provinces analyzed. The most pronounced monthly increase is recorded by Navarra, with 8.2%, followed by Cuenca (+ 7.4%), Huesca (+ 4.9%), Ávila (+ 4%) and Jaén (+ 3.9%) . On the contrary, the cheapest provinces to rent were Castellón (-2.7%), Girona (-1.7%), Cáceres and Valladolid (both with -1.4%).
Only six provinces exceed 10 euros per square meter in October, with Barcelona being the most expensive province, with 15.54 euros on average square meter, followed by Madrid (14.82 euros), Guipúzcoa (14.45 euros), Balearic Islands (12.49 euros), Vizcaya (12.18 euros) and Las Palmas (10.09 euros).
Experts rule out for now that construction is going to enter negative ground, but trust has already begun to resent. According to the Construction Sector Survey published by the Ministry of Industry, Commerce and Tourism, the Construction Climate Indicator (ICC) in Spain fell to a value of -5.4 points in the month of October, 2 , 5 less than the previous month and 7.4 below the value recorded in October 2018. The decline is motivated by lower employment expectations (-1.8 points) and in the order book (-8.9 points)
"This year we are still going to grow, but next we could find more problems," said the sources consulted. According to their estimates, in terms of national accounting, growth is expected between 3% and 4% on an annual average . And the same goes for employment, where they aspire to close the year by creating jobs, compared to the expected moderation for 2020.
The sector is also no stranger to the impact of the political situation in our country. The parliamentary fragmentation coming out of the polls last November 10 leaves in the air numerous regulatory issues that could end up affecting the different construction activities. A priori , the PSOE intended to increase infrastructure spending, but everything will depend on the alliances that finally managed to gather and the progress of the economy itself. "If the budgets are very rigid, there will be problems to guarantee those investments. If you have to choose between building roads or building hospitals, the choice seems clear," they point out from the sector.
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