Sunday, June 29, 2008

Government plans to reduce vacancy rates

Spain's housing minister Beatriz Corredor has stated that the property sector slowdown will be over by late 2009, according to a Reuters report.

Spanish property market is currently experiencing a considerable slowdown in its residential and construction market and an obvious slowdown in its economic growth. The government of Spain has attempted to stop the housing market slowdown by various initiatives and property experts believe that the market will adjust itself gradually in the future.

There is a severe oversupply of homes in Spain, equating to around 1m residential units.

Nearly 50,000 and 100,000 of these Spanish homes are reportedly located in the Valencia region. The oversupply of homes in Valencia has made the Generalitat regional government wants to see the current housing regulations amended to facilitate other Spanish regions, to sell properties in Valencia as VPO assisted or council housing.

The Generalitat has recommended that a pilot scheme be introduced with an initial 10,000 properties offered on the VPO scheme at a discount of €15,000 (approx £12,000). The housing minister said that the properties are available to those who are resident in the Valencia region and who earn as much as €45,000 per year (around £35,600). The current fears of a property crash has made the mortgage market more liberalized and low-quality developments are reviewed, while the issues concerning off-plan investors are addressed by the government.