For a long time, the economic boom in Spain has spurred the growth of the Spanish construction industry. The growth has been considerably fuelled by Spanish culture of property ownership rather than leasing, the increased number of retired people seeking warmer climate to live in, and the increased demand for new houses due to population increase caused by an influx of immigrants, who wanted houses of their own.
The report, Construction in Spain to 2018: Market Forecast provides a detailed insight into the operating environment of the construction industry in Spain. It contains historic and forecast market value data for the construction industry, including a breakdown of the data by construction activity taking place in the country.
Real estate investments in Spain more lucrative
The real estate investments in construction industry in Spain have been more lucrative especially when compared to the stock market. Even financial institutions like banks denied to be excluded from this profitable business and are known to lend money to promoters and construction workers, financing more acquisition of land and construction. In this market, where the rise of the price of land and real estate had no end, this was an easy game to earn money. However, this price hike also saw companies in debt, sometimes ending up with owning banks billions of euros. The market would probably have suffered more than predicted, but then the American subprime crisis occurred, where developers failed to pay and stopped their construction work with the state eventually bailing them out of this crisis.
On the path towards recovery
Market research on the construction industry in Spain indicates that the market finally found respite when their major banks, Caixabank and Sabadell, both from the northern region of Catalonia, said bad loans as a percentage of total credit dropped at the end of March compared with the end of December. These two banks did not need any resources during the crisis. Therefore, after several years, Bank of Spain finally expected that GDP would grow at 0.4% in first three months of 2014.
Despite this recovery, many are still complaining that this improvement will be slow to feed through to the real economy. With multitudes, still unemployed, it still is a threat to banks and many forecast that their overall stock of loans will fall again this year as consumers and businesses try to settle their debts adversely affecting the construction sector in Spain.
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