New construction in Andalucia on the rise

Allow me to introduce myself before I jump into how new construction in Andalucia is on the rise. My name is Costas and I am a founder/partner of HBC Costa del Sol Properties. I like researching financial matters and data. Today I would like to share some of my statistics with you on Spain Buddy and I hope you will find them equally exciting!

One of the unofficial conversation subjects currently heard in the real estate world, is the pace of new construction on the Costa del Sol. It’s easy enough to observe that over the last year many cranes have popped up behind many a corner – but I like statistics so I went on a search to verify.

One of my favourite websites to lurk around is INE.es, Spain’s statistical office. It is a treasure trove of information, even though it is not always easy to navigate. On the subject at hand, it offers us the following succinct data table for the whole of Spain, which shows the year period (first column), the total number of housing starts (second column), and number of residential housing starts (third column).

New housing

You can see the increase in both residential and business construction starts, especially since 2015. The year 2017 so far has advanced as follows:

Almost 10,000 project units up to May, which means we are heading for matching 2016 and more. Now, this data is for the whole of the country, so how does new construction in Andalucia fare?

The data only goes to April 2017, but it shows that around 25% of the new Spanish construction was in Andalucia! Coupled with the 2.6% increase in prices for new construction residential units in the 2nd trimester – see HERE) it all points to a rather frenetic pace in new developments on the Costa del Sol.

It is also important to examine tangential subjects, related to construction. By looking at the number of large trucks registered at the Traffic Authority, we can see an increase of 12.5% between 2015 and 2016, which is much higher than the 7% of overall vehicle registrations. This is supporting evidence that, in relative terms, suggests that heavy trucks of the type used in construction (i.e. not for goods distribution), are on the up too! (see HERE)

So where is all this demand coming from? Until the end of the year we will not know for sure what the statistics will show, however let me finish with an informal piece of data. This is the type of information that you should take with plenty of salt pinches, but here it is anyway, at least for entertainment value! At HBC we were recently trying to sign an agreement with one of the luxury Costa del Sol developments we were interested in marketing. We entered confident that we would comfortably agree on a sales contract. Instead, the developer said: “I have too many estate agents with agreements already, and I’ve already sold Phase 1 (which has not even been started)”. We were eventually just about able to strike the deal, but we were curious as to where did all the sales come from. We learned that Nordic and German demand is driving most of the modern, contemporary styled construction that is now taking place on the Costa del Sol. In effect validating what the numbers above show – new developments are currently much more in demand than resale properties.

I hope you enjoyed the post and would be very interested to hear your opinions in the comments below. Thanks for reading.