THis is a translation of a recent article from El Confidencial (31/03/2018)  The Original Article in Spanish can be found by clicking on this link.

urban chaos spreads throughout Spain after the ‘boom’

A situation denounced by the developers since the real estate recovery began. They criticize that the  problem of Developable land is not having the desired response from the administration

Photo: Image: Appraisal Society.

Image: Appraisal Society.

 

 

READING TIME 10 min

From Madrid, to Marbella, passing through the coastal municipalities of the Valencian Community. In the process of recovery of the real estate market , the lack of land in the locations where there is greater demand for housing , is becoming a real headache for developers and a future problem for citizens who want to buy a house, as these will become more and more expensive. A situation that has begun to worsen and cause upward price tensions in some areas with problems or urban planning uncertainty .

“The great problem of the sector at this moment is the great judicial conflict .” In the last decade, fifty urban muncipal plans have been annulled by superior courts and by the Supreme Court, 20% correspond to provincial capitals and that means that approximately 15% of the population is affected, José Ramón Blanco, director of Promotions Pryconsa said recently at a real estate meeting that “both the state legislator and the autonomic courts have to resolve this situation, ”

Marbella, Gijón, Santander or Vigo are locations where general plans are paralysed

Marbella , Gijón, Santander, Orense, Vigo, Santa Cruz de Tenerife, Boadilla del Monte , Nigrán, Gondomar, Benissa, Baeza, Denia, Guillena, Alcorcón, Moraleja de Enmedio, Cartagena, Vic are just some of the localities where the general plans are paralysed . To these can be added as many partial development plans and specific development sectors of certain locations, which are also in the air.

This is a situation that developers have been denouncing since the real estate recovery began almost four years ago, They criticise, almost daily, that the problem of land is not generating the desired response from public administrations and that they have failed to take advantage of the crisis years to put developable land on the market.

The eternal problem of Land

“El suelo es un problema endémico del sector que puede llevarnos de nuevo a caer en los viejos problemas del pasado. Las subidas del precio del suelo acaban repercutiendo en el precio de la vivienda y esto a su vez repercute en otros factores, como por ejemplo en el esfuerzo de las familias para comprar casa”, aseguraba recientemente el presidente de los promotores de Madrid (Asprima), Juan Antonio Gómez Pintado.

The situation in the capital is a clear example of these tensions. A growing market, where the appetite for buying finalised land is voracious – there is a huge competition to seize the few plots of land for sale -, which has provoked strong upward pressure on prices – first of house prices and then of land. Whilst  the property sector officially denies that land is being bought  based on expectations of future rises in house prices ( speculation ), the fact is that there is concern that some developers are doing just that.

RUTH UGALDE

In Madrid, the prices of new houses have risen by almost 7% in just six months, according to the Appraisal Society, and although there is no relevant urban planning conflict , the truth is that there remain many questions about the city and about specific developments. Pending approval is the area popularly known as Operation Chamartín – now Distrito Castellana Norte – or Operation Mahou Calderón , while the City Council has also just paralyzed, by requiring a Master Plan, the so-called Southeast Developments,“cutting”, in the words of Pintado himself, the possibilities of growth of the city, by eliminating the capacity to generate protected and affordable housing in the capital, in addition to limiting access to finalised land in the capital.

The case of the capital of Spain is especially prominent since, as recently recognized the CEO of the appraiser, Juan Fernández-Aceytuno, “levels of impact of 47-48%, such as those that are being seen in Madrid or Barcelona where housing prices have increased by 5% are engaged in a reheating of  land prices . ”

Criticism of 

the developer sector

 also affects the Community of Madrid because, although the Land Law  which Madrid’s regional administration preparing is likely to be approved before the summer, “it does not advance too much in terms of legal security or reduce approval times. The general plans are not rules, they are regulations and, therefore, null and void if a relevant procedure is missed, “said Felipe Iglesias, a consultant from the Uría Menéndez office who alos identifies what is lacking in Madrid” First, what should have been done is a comprehensive plan of the entire territory, we have squandered the crisis to take land and to legislate. “

Marbella paralysis diverts investment

However, as shown by the ‘Urban Map’ of Sociedad de Tasación, Madrid is not the only market in tension due to lack of finalised land . In Marbella, one of the booming coastal areas , the annulment of the 2010 General Urban Plan (PGOU) by the Supreme Court at the end of 2015 has led to a transfer of investments to neighboring towns such as Estepona, Ojén, Benahavís or Mijas, with significant upward pressure on land prices .

However, “although Marbella faces some difficulties due to the cancellation of the PGOU, it has a lot of new work”, point out Tinsa, who recal that the adaptation of the PGOU of 1986 to the Law of Urban Planning of Andalusia (LOUA) is being processed. “in order to provide land for the construction of protected housing and a legal and urban stability that they do not have now”.

In Marbella, the cancellation of the PGOU has led to a transfer of investments to neighboring towns such as Estepona, Ojén, Benahavís or Mijas

TINSA point out that the rest of the municipalities of the Costa del Sol do not have “big” problems at a general level, “although in Mijas, Manilva and Benalmádena, urban problems of some sectors or execution units have been detected , which have been developed or approved illegally and that need some urban modification (modification of elements, new reparcelling …) that allows the vacant plots of those areas to be built “. This is the case, for example, of El Hipódromo and the Santa Ana Golf Course in Mijas or the Calahiguera sector in Benalmádena.

In these areas, as happens in Madrid, “the slowness of some municipalities and the administration itself in the processing of the revision of the general plans is delaying the new construction of areas with potential demand such  as Benahavís and Torremolinos”, point outTinsa.

Alert for the protection of the coast

Another area to take into account is the Valencian Community and all its coastal zone where there is a smooth evolution of the market, although there is a rebound of activity in land located in consolidated areas of the cities of Valencia and Castellón, with Alicante in the process of stabilization, after getting on the recovery wagon two years after Madrid and Barcelona. In Castellón the General Plan has recently been approved, while Peñíscola or Denia still lack one.

Lo más significativo, no obstante, es la tramitación del Plan de Acción Territorial de la Infraestructura Verde del Litoral (Pativel), un plan de reordenación de todo el litoral, cuyo objetivo es preservar y proteger la costa de la Comunidad Valenciana. De hecho, prácticamente prohíbe toda nueva construcción en los primeros 500 metros desde el mar hacia el interior, y afecta, en menor medida, hasta los dos kilómetros desde el mar hacia el interior. Según los expertos, su carácter supramunicipal tendrá un impacto en toda la zona costera de la comunidad, en concreto en aquellas zonas aún sin ordenar. Desde noviembre de 2015 estarían suspendidas las licencias en los suelos afectados.

In Catalonia, without major urban controversies, it is the political situation that is complicating the evolution of the residential and land market

One of the areas that may also be affected is Murcia, where there are still important areas of vacant land in stock. In the Murcian region, 17 years have passed since the PGOU was approved and since then, developments have been approved, totaling 240,150 new homes. According to teh regional newspaper ‘La Verdad de Murcia’, certain urban developments-some of which are under judicial investigation-were granted a buildable volume that was in excess of that which is legally permitted. In Cartagena, the suspension of the General Plan is causing a significant reduction in real estate activity .

 

However, the independence crisis has already been felt in Catalan lands. According to data from Tecnocasa, in the last quarter of 2017, the sale price of homes in Barcelona decreased by 1.34%, the first decline since the real estate recovery began in 2014. “If this dynamic continues, in In the first half of 2018 it is likely that the price of housing in Barcelona will stop growing with the same intensity as it has been doing so far, “said Lazaro Cubero, director of the company’s analysis department. Not only that, but in the last three months there has been a decrease in the number of investors in Barcelona, ​​which came to represent 37.4% of transactions at 27.3%.

View of Ibiza from the sea.

View of Ibiza from the sea.

Ibiza begins to deflate

In the Balearic Islands dynamism is consolidated, both by the increase in demand and by the increase in prices , especially in coastal areas, especially in Ibiza. However, this market begins to turn and  the Valuation Society have begun to observe a stagnation of prices . The island is waiting for the PGOU (Municpal Urban Plan) to be approved by the City Council, which undoubtedly affects the authorization of new promotions.

In other markets, Toledo stands out, where the City Council is working on updating the PGOU in 1986, -the Municipal Plan of 2007 was declared null-, while in Galicia, the planning is stopped in Barreiros, Vigo and Orense. Vigo, for example will have a new Urban Planning Plan within an estimated period of four years, as published a couple of months ago by the local press. In Asturias, the General Plan of Gijón has been suspended for several years, while Llanes has not had a general plan for several years. “You have to go to the quota or local urban regulations to obtain licenses,” says Juan Fernández-Aceytuno. In Santander and Laredo the PGOU has recently been cancelled, giving rise to a total break in any land development.

ALFREDO PASCUAL

According to the experts, the drafting of all these plans is key to putting  finalised land on the market that allows housing to be built and avoids upward tensions in house prices, although not in all areas with urban problems – either by the paralysis or cancellation of a general plan or a partial development plan-, there is real demand for housing.

According to Tinsa in their latest report on the coastal residential market, in the municipalities of Burela, Ribadeo and Xove, the General Plan has been definitively approved, although the request for licenses has not changed significantly. That is, although the planning is stopped, there is no demand for these homes, unlike what is happening in Madrid or Marbella.