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The big Spanish property companies are all agreed on one thing: if a lot more land is not made available for building in the immediate future, the price of housing will rise sharply over the coming two years. This was the message in the G-14 meeting last week, when a property sector lobby made up of the 14 biggest property companies in the country gathered to discuss the future of their sector. They also warned the public administrations that urban planning paperwork is stifling the industry, and it needs to be simplified. The president of the group, who also heads the Martinsa-Fadesa company, Fernando Martín, assured his listeners that neither property prices not interest rates will fall in the immediate future.

Martín criticised the ‘voices of alarm,’ as he put it, which are creating unnecessary worry with respect to property prices in Spain. He was unhappy about the image of the industry in this country, he said, adding that “it does not correspond with its weight in the economy.” He recognised, nevertheless, that many companies are unable to present a proper image to society at large. This was the reason the G-14 group was established in the first place, he said.

The property group spokesman rejected outright that property companies plan to drop house prices in the near future, adding that it is much the same paying 170,000 as 200,000 euros for an apartment. As far as the G-14 is concerned, he added, the important thing is that building land is made more easily available. “It takes an average of six years to have land zoned for building in Spain, while in Mexico or Morocco, it takes no more than a year and a half.”

Rafael Santamaría, president of the Reyal-Urbis company, spoke of other fears in the sector. Referring to old houses, he expressed a view contrary to that of Martín. According to him, those people who bought houses in the past as investment may be encouraged, through fear of falling prices, to put them on the market at the same time, and this would lead to a sharp drop in prices.

Also demanding that the bureaucratic process be simplified, Martín called for houses of 40 or 50 square metres to be allowed by the public administrations, or even that houses already built be divided into smaller units that purchasers could afford. He accepted that sales have slowed down, but denied any crisis in the industry, adding that in the first nine months of the year, the initiation of house building by his group had fallen by 60 per cent, while visits to show houses had fallen by 45 per cent.

In spite of his desire to send a tranquillising message, Martín said that if this trend continues, and reminding us that the building industry accounts for 25 per cent of overall employment, then the Spanish economy will be in serious trouble. He said that for every house not built, an average of three jobs are lost, mainly by immigrant workers. Such a scenario, he added, could result in the loss of thousands of jobs, and lead to social disturbance. On the future of the industry, Martín said that we would see more smaller companies being taken over by bigger ones.

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Is any property below €50,000 a cheap Spanish property? Are cheap Spanish properties only to be found at auction or as bank repossessions? How much below market value does a Spanish property need to be to be considered cheap?