The Vega Baja leads the way
The level of construction activity in Spain at the moment is still extremely low and the province of Alicante is no exception, but at least the latest figures published by the province’s architects and building engineers indicate that things appear to be picking up slightly.
The Cooateiea organization which represents these professionals reports that in the first quarter of this year building licences for 670 new homes were requested, 21% more than in the same period last year. This figure is still barely comparable to the 10,000 permits per quarter which were regularly processed in the boom years, but nevertheless it represents is the highest first-quarter figure since 2009, and is giving rise to guarded optimism.
For some analysts the classic model of recovery is being followed in Alicante: first, demand from outside the area increases as buyers and investors are attracted by low market prices, and then holiday homes will be snapped up by purchasers from other parts of Spain. Finally, when the situation eventually returns to normal, the market for first residences will return to the health it enjoyed before the bubble burst at the end of 2007, although for this to happen the economy as a whole will first have to consolidate signs of permanent recovery in the province.
Most of the upturn in construction is in municipalities of the Vega Baja del Segura with a high proportion of non-Spanish residents: licences were requested for 166 new homes in Orihuela, 84 in Torrevieja, 53 in Pilar de la Horadada, 23 in Salinas and 22 in Rosales, while outside the Vega Baja the most productive municipalities were Elche (153) and El Campello (32). The spate of activity has not yet spread inland, it seems, and most of the non-tourist municipalities remained stagnant in this respect.
However, crossing into the Vega Baja the presence of cranes is certainly noticeable, a sight which has been totally absent from other parts of Spain for the last couple of years.
True recovery will have been achieved when there is a uniform increase in demand for construction and residential property, and this is clearly not the case just yet. One of the main reasons for this continues to be that young first-time buyers simply can’t find a way to climb onto the first rung in the property ladder, and until the banks offer more lenient credit facilities and the prospects for long-term employment improve significantly this is likely to continue to be the case.
Image: Cranes on the skyline once again. Construction in Torrevieja during April 2014. Copyright Valencia Today
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