New Laws Push Up Prices
July 31st, 2006
New land laws aimed at cutting house prices in Spain will have the opposite effect, warn the country’s housebuilders.
Spanish property developers are warning that proposed land laws will push up house prices by 10 per cent – not reduce them, as is the intention of the Spanish government.
The law proposes developers must hand over between 15-20 per cent of land which has been classified for urban use.
Instead of helping to reduce prices, the land laws will have the opposite effect, say the Association of Spanish Property Developers (APCE).
They claim that land makes up between 40-60 per cent of a house’s construction costs and that the new law will put increased financial burdens on buyers as developers would pass on the extra costs to them.
Following recent property scams and alleged local authority corruption in Marbella, Costa de Sol, some developers in Spain also face new consumer protection legislation that is likely to increase their construction costs and prices to housebuyers.
Other developers, like Grupo Osuna, one of the country’s biggest property firms, say they already comply with the new proposed standards and their prices are unlikely to change as a result of new legislation.
Terry Walker of PropertyInSpain.Net said: “Buyer protection is now greater in Spain than in the UK despite the scams in Marbella and Spain’s 10-year construction guarantee is stronger than the UK’s NHBC guarantee. We already provide an independent Legal Surety on 8,000 off plan properties from all the leading developers. They have welcomed and joined our scheme that bridges a gap in Spain’s consumer protection laws.”
PropertyInSpain.Net, founder members of the Association of International Property Professionals (AIPP), are property partners of leading Spanish banks, La Caixa, Caja Murcia and Banco Sabadell/Solbank.
They have an extensive network of affiliate offices in 10 Costas, Mallorca and Ibiza.
The Spanish Housing Ministry said house prices in the past year to June had risen by 10.8 per cent, a fall from the previous 11.8 per cent.
