The price of land, by clouds in the big cities of Madrid

The price of land, by clouds in the big cities of Madrid


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The price of land is skyrocketing in Madrid capital and in the major cities of the region. The real estate developers are observing it in their day to day and they have come to confirm the official statistics of the Ministry of development. According to these data, the urban land in the municipalities of Madrid with more than 50,000 inhabitants has increased by 30% in the last two years and accumulates a rebound of 44% since 2014.

In these cities, which are the ones with the highest real estate activity and the most dynamic market, the price of land reached the historic maximum in 2006: an average of 1,251.3 euros per square meter. Since then, as happened throughout Spain, the price plummeted when the real estate "bubble" burst. The correction was very prolonged, with uninterrupted devaluations that extended until 2014. That year the minimum price was given since the beginning of the crisis: 405.3 euros per square meter, on average, in urban lots in Madrid's municipalities of more than 50,000 inhabitants. From there, the comeback began. From that average of 405.3 euros has passed to the 583.9 euros at the end of 2018.

The rise has been accelerated, well above the average revaluation that has occurred in the whole of Spain. According to the employers' association of the sector, this is because most demanded areas and the best areas to build they do not have enough available land, the administrative bureaucracy is still too slow and that ends up "heating up" the market and favoring an increase in land prices.

Valdebebas and El Cañaveral, two examples of areas where prices have skyrocketed

The managing director of the Association of Real Estate Developers of Madrid (Asprima), Daniel Cuervo, warns that "there are some increases in land prices that are not healthy for anyone", because "the higher the price is, the greater the risk assumed by the developer" and this increase in costs ends up having an effect on the pocket of the final buyer.

The statistics of Development indicate an average increase of 44% in the urban land of the main cities of Madrid. But we must bear in mind that this is an average: this rise in prices is much more pronounced in the urban areas most in demand and most appreciated. Thus, the Managing Director of Asprima, who is also General Secretary of the Association of Builders Promoters of Spain (APCE), gives as an example the area of ​​Valdebebas, "where in 2015 land prices were around 700-800 euros per square meter and now approaching 2,000 euros." Another sample button, he says, are the lands of El Cañaveral, in Vicálvaro. Explains that, three years ago, there could be purchased urban land between 250 and 300 euros per square meter, while now 800 euros are reached.

These strong increases contrast with the more "moderate" indicated by the statistics of Development in the average data. The explanation, says Daniel Cuervo, is that in these media they compute all the operations of buying and selling solar: those that occur in the areas that have triggered their price, but also others that are becoming more discreetly priced. In the end -explains- as there is a lack of soil in the most sought and demanded areas, the promoters have to go to other places in the surroundings, which are cheaper. And, statistically, when calculating all the operations, the rise that is taking place in specific areas is cushioned by the cheaper operations that are being formalized in more accessible enclave soils.

Bureaucracy and market

In any case, everything points to the same thing: the overheating that is taking place in the urban land market. The management of the sector considers that the Administration has a direct responsibility in this phenomenon, because it has a large room for maneuver. On the one hand, with the urban planning that the city councils decide, the general plans of urban planning that allow to expand the urban land. On the other hand, with the greater or lesser agility that the bureaucratic apparatus imposes when it comes to giving direction to concrete urban development and building projects. And the employers believe that the Administration is still not agile, which slows down the projects, slows the supply grows at the same time as the demand and, in the end, all this has an impact that is being noticeably felt in Madrid's cities.

Daniel Cuervo affirms that after the price escalation in The Cañaveral or Valdebebas there is the urban paralysis that occurs in key areas of Madrid capital, a concrete case of "the great bag of land that is paralyzed in the Southeast Strategy". The managing director of the employers Asprima says that the impossibility of building in Madrid capital is what explains the strong increase in real estate developments in areas such as Bohadilla, Getafe, Pinto or Alcobendas.

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