Spain’s ghost towns and half-finished developments could finally start to see life, as falling prices in the country’s embattled real estate sector begin to signal the end of a seven-year slump, says ratings agency Fitch.
The signs of recovery are down to a return of mortgage credit, which dried up following the global financial crisis in 2007-8. However, Spain still has a long way to go: High unemployment rates and a surplus of properties will prevent rapid price growth. In Spain, around 768,000 houses built between 2002 and 2011 remain empty, according to the Spanish Statistical Office (INE).
Following the global financial crisis, Spain’s speculative property bubble, which saw thousands of new homes built across the country and house prices rise 44 percent from 2004 to 2008, burst. This sent property prices plunging, banks to the brink of collapse on large numbers of unpaid mortgages and modern-day “ghost towns” of unsold properties.
At the Sesena development near Madrid, less than half of the 13,000 apartments meant to make up the development were built. In Yebes development, also close the capital, only 1,500 of the projected 9,000 apartments were built.