The construction sector has long recovered from the crisis caused by COVID-19 and in recent years has gained a construction speed significantly exceeding the pre-pandemic indicators. Nevertheless, the current indicators are still insufficient to meet the demand that has formed.
Even before 2020, industry representatives indicated that the pace of launching new construction projects should reach 125,000 to 150,000 per year. This was pointed out, for example. Juan Antonio Gomez-Pintado, President of the Association of Developers of Spain (APCEspaña).
Judging by the data of the Ministry of Construction of Spain (Mitma), the number of permits for new construction in 2022 exceeded the mark of 108,000, which can be compared with the figures shown by the sector in the late 00s. In 2018-19, about 100,000 construction permits were issued.
Nevertheless, last year's figures show that only 500 more construction permits were received than recorded in 2021. Consuelo Villanueva, presenting the position of Sociedad de Tasación, emphasizes that such growth rates not only do not satisfy the current situation, but also do not allow us to expect an improvement in the situation in the coming years.
The problem with increasing the pace of construction is multifactorial. Expensive construction is caused by high labor prices, due to the shortage of it, expensive building materials and a shortage of free land for construction. Approval of new sites takes a long time, competition for them is high and this causes high costs for its acquisition. You can also add inflation and more expensive lending due to rising interest rates.
Due to these and a number of other reasons, some construction projects are also frozen. In 2022, the number of completion certificates decreased by 2.8% compared to the previous year. 88,846 residential properties were put on the market. Although this is one of the best indicators of recent years, second only to 2021, it is far from the figures of the late 00s and insufficient to meet the existing demand.
The solution to the problem lies beyond the construction sector alone. Spain will need to make efforts in several areas, including through the state line, to make the conditions adequate to increase the pace of construction. At a minimum, the period for obtaining permits for construction and land issuance should be reduced. Now it can stretch for a period of 3 to 18 months.
