The construction of officially protected housing (HPO) has woken up after ten years of lethargy, encouraged by European funds, the impetus of the administrations and financing conditions more favorable than those of the market after the Bank’s rate hikes European Central Bank (ECB). According to a report by the consulting company Doubletrade, in the first nine months of the year, construction began – the delivery of keys usually takes around eighteen months – of 31,243 homes of this type in Spain, 80% more than a year earlier .
The big upturn has occurred in the Community of Madrid, where activity is now two and a half times higher than a year ago, with 17,960 homes. On the other hand, in Catalonia, which shares with Madrid the largest accommodation deficit, the figure has gone from 2,069 to 2,729. It is an increase of 35%, not enough to reduce the growing gap between the two main autonomous regions of Spain. Madrid is building 6.5 times more sheltered housing than Catalonia.
The upturn, according to sources from the Ministry of Transport, Mobility and Urban Agenda, is related to the 1,000 million euros of Next Generation funds distributed over the last two years among the autonomous communities to build 20,000 sheltered homes.
Added to this is a change in the financial scenario. “The increase in the cost of financing has slowed down free housing, which is affected, but official protection has a fixed price and loans with the help of the Administration”, explains the president of the National Confederation of Construction (CNC), Pedro Fernández Alén.
Builders attribute Madrid’s greater speed to the fact that land valuations and the update of maximum sale prices have arrived earlier. “Sheltered housing will be an important part of our activity and there is interest from companies”, indicate sources in the sector.
Doubletrade data breaks a decade-long drought. A recent report from the Pompeu Fabra University, in this case with officially protected housing delivered to Spain, gives an account of what has happened: if in 1996 the rate was more than 80,000 a year, in 2008 it still exceeded the 60,000, until in 2012 the number dropped from 45,000 to almost zero four years later.
Sareb explains that at the end of this year the first seven lots of the Viena Project will be tendered for the construction of affordable rental housing throughout Spain. With the help of PwC, land has already been identified to build a first batch of 3,500 homes, with the aim of gradually removing land to reach between 12,000 and 15,000 homes.
Sareb has already contacted interested investors, to whom it will transfer the land for a period of between 65 and 80 years so that they can build homes there and exploit them for rent. Investors will be able to enjoy financing from the EIB and the Addendum of the Next Generation program.
For builders there is an opportunity to compensate for the slowdown in vacant housing. The public tender until August is close to 19,000 million and increases by 7.5% compared to the same period in 2022, according to the association of construction companies Seopan.
The Central Government has announced a plan to build 184,000 affordable rental homes and has approved a loan line of 4,000 million to promote the development of 43,000. It is signing agreements with autonomous communities, including a recent one with the Generalitat and several Catalan municipalities to build 761 homes.
Madrid has large urban planning projects in its favour, such as Madrid Nuevo Norte, where 10,500 homes will be built, 20% of which are protected.
The resumption of official protection works has to do with a “government bet”, says Doubletrade. “The aim is to unblock demand by increasing the offer at affordable prices so that the sector gets back on track”, says the general manager in Spain, Xavier Piccinini.
