The drop in construction costs, of 9.5% last year, and the strength of sales has once again reactivated housing development, and in the first months of this year construction management visas have exceeded sales for the first time since the start of the pandemic, according to Luis Fabra, director of the real estate market chair at the University of Zaragoza.
Fabra, who presented a report on the real estate market in Catalonia prepared for the Colleges and the Association of Real Estate Agents of Catalonia, explained that visas had been below sales for years. “It sold more than it started, but this has changed at the beginning of this year,” which he attributes to “an improvement in promoters’ expectations.” “Yours is a difficult business,” she recalled, because banks require between 50% and 60% pre-sales to provide financing to start the work. “Selling today, a product that will end within two years, with the volatility of costs and sales, has a lot of risk,” he acknowledged.
In the last year, however, construction costs have been reduced by 9.5% due to the drop in the cost of materials (19.2%), which has been only partially offset by the rise in labor costs. work, which has been 8%. “Some materials have suffered spectacular falls,” such as steel (73%), flat glass (46%) or synthetic materials (25%). However, the report indicates that the cost of building a home is still 20% higher than in January 2020, before covid.
According to Fabra data, in the last twelve months in Catalonia 16,430 new construction visas have been requested, a figure that exceeds by 7.2% the 15,325 new homes sold in the same period, as well as the 15,221 visas that annually from the previous quarter.
“It is a very balanced housing offer, and very far from what happened in the bubble years,” he recalled, in which visas doubled home sales in 2006.
Fabra highlighted that the growth in visas also responds to the strength of new home sales: in the first quarter, 4,369 units were sold, 1.9% more than the previous year, compared to a 4.7% drop in Total sales driven by a 6.1% decline in second-hand sales.
New construction thus reached 17.18% of sales, the highest since 2015, “a very notable figure that will possibly continue,” he said, “because it is increasingly a more differentiated product, due to innovation, design, energy efficiency. , for example, and whose price is still below the maximum of the boom years.”
With all this, the average price of new housing sold this quarter in Catalonia has been 2,676 euros/m², the highest since the beginning of 2009, with a year-on-year increase of 4.1%, compared to the 1.9% increase that registered the second-hand one. “The average price is still about 500 euros below the historical maximum recorded in 2007, when in many communities it has already clearly surpassed it,” he warned.
Among the largest cities in Catalonia, the greatest weight of new construction in sales occurs in Vilanova i la Geltrú (31%), Badalona (28%), Manresa (26%), Mataró (24%) and Girona. At the other extreme, where it has the least weight is in Terrassa (8.8%), Barcelona (8.5%), Ripoll (7.3%), Santa Coloma de Gramenet (2%) and Rubí (1%).