Spanish property market sees planning approvals decline

The Spanish property market has seen planning approvals decline by 89 per cent in the last four years.

Indeed, there were just 91,662 approvals last year, compared with the record 865,561 in 2006.

While this is still bad news for the construction sector in Spain, it does at least suggest that the market is now bottoming out. Mark Stucklin, from Spanish Property Insight, said that this could be "the beginning of the end of this crisis". He added: "I forecast that 2010 will mark the bottom of this cycle for Spain's residential construction industry.

"New home construction will start growing again in 2011, albeit weakly and from an exceptionally low base."

Meanwhile, Spanish property prices are still declining with a drop of 4.5 per cent recorded in the year to February 2011. According to Kyero, there are new factors beginning to affect the market after the major changes in taxation implemented in 2010.

This year, the rise in inflation and the increase in mortgage rates are likely to be the main issues in the Spanish property market. 

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