Developers: lack of supply to blame for low new home sales

Anocheche, Costa del Sol Photo: Antonio

Spanish developers are blaming a lack of supply for recent falls in new home sales.

The latest figures from the National Institution of Statistics (INE) show that the number of new home sales has fallen by more than 40 per cent in the past year to March 2015.

In February 2015, INE statistics highlighted the relative weakness of the new build setor, as sales of existing homes jumped 52 per cent, while new home sales fell 30 per cent annually.

Now, the Spanish Association of Builders and Developers (APCE) has pinned the blame for the falling sales on the lack of new homes in the development pipeline. This problem is due to a lack of financing from banks, which has prevented developers from launching new projects.

"It's very probable that there are fewer sales between there are fewer projects being started," Carolina Roca, a member of the APCE executive committee, told El Mundo.

Roca acknowledges that lenders are affected by their exposure to developers in the "property boom" years. She adds that the recovery of house prices is a positive sign, but that the market being fuelled by existing home sales is not creating economic activity or new jobs.