Spain has nearly 700,000 unsold new homes

Spain had nearly 700,000 new homes sitting unsold at the end of last year, with more than half clustered on the country's overdeveloped coast, the government said Tuesday. With demand fuelled by low interest rates and easy credit, Spain built nearly 700,000 new homes each year during most of the previous decade -- as much as Britain, France and Germany combined. But the global credit crunch and oversupply caused the property sector to collapse in 2008, plunging the Spanish economy into its worst recession in decades. There were 687,523 unsold homes in Spain at the end of 2010, a 0.08 percent drop from the total the previous year and the first drop since 2005, the public works, housing and transport ministry said in a statement. The drop was fuelled by a 5.9-percent increase last year in sales of new homes in Spain after three years running of falling home sales. Property purchases by foreign residents in Spain increased by 20.8 percent over 2009 as buyers took advantage of falling prices. More than half of the unsold new homes, 61 percent, are concentrated in the provinces of the coast and the Balearic and Canary Islands, according to the ministry. The number of unsold homes in Spain has risen steadily in recent years. It stood at 195,184 at the end of 2005, nearly double from the previous year. The unsold housing stock rose to 273,363 in 2006, 413,642 in 2007 and 613,512 in 2008. The government estimates it will take until 2014 for Spain to clear the bulk of its unsold housing stock.