Spain’s new housing starts to drop to 1960 levels

MADRID – The number of new homes which will start being built next year in Spain will drop to less than 150,000, an industry association said Wednesday, putting them at their lowest level since 1960.

"The year 2009 will not arrive with promising perspectives," the Property Promoters Association of Madrid (Asprima) said in a statement which summarised the findings of a real estate conference held a day earlier.

In 2006, at the height of a decade-long property boom, Spain recorded 760,000 new housing starts. However, the market began to cool sharply in 2007 due to rising interest rates, the global credit crunch and oversupply.

In March, Asprima predicted 400,000 new housing starts for 2008 but its president Jose Manuel Galindo on Tuesday revised that figure down to around 250,000, the daily newspaper El Pais reported.

Spanish house prices dropped 7.8 percent in November, the ninth consecutive month of declines as the property sector slump deepened, property surveyor group Tinsa said Tuesday.

The collapse in the housing sector has helped push the unemployment rate in Spain in the third quarter to 11.3 percent, its highest level in over four years and the highest rate in the 27-nation European union.

[AFP / Expatica]