VALENCIAN UNSOLD PROPERTY TO BECOME SOCIAL HOUSING
Valencia’s Generalitat regional government has asked the central government in Madrid for permission to introduce regulations enabling it to sell some of the thousands of unsold properties lying empty in the region as VPO or social housing.VPO, (Vivienda de proteccion official) classed property is offered to first time buyers, or people on relatively low incomes, subsidised by developers and government as way of helping certain sections of the community onto the housing ladder.Valencia’s regional councillor for housing, José Ramón García Antón, met with national minister for housing Beatriz Corredor, to discuss the proposal, which would initially offer some 10,000 properties under the VPO scheme with price reductions of around €15,000. The subsidised stock would only be available to households with a combined income of under €45,000 per year. Certain VPO projects in Alicante for example are only available to families earning under €20,000 per year.Reports vary as to the amount of unsold stock on the Spanish market, however according to CB Richard Ellis the figure stands at one million, with 50,000 – 100,000 of those located across Valencia. A recent report published in El Pais supports this and suggested that one third of the 1.8 million properties built in Spain since 2005 remain unsold.
Increase in interest
Analysts believe that as more stock languishes on the market, and developers struggle to find investors to take this up, more projects will be reconfigured to accept VPO buyers.“There are some advantages for VPO projects (Vivienda de proteccion oficial) for developers,” said Charles de Ros Wallace, director general of Spanish-based CAM Bank. “This means that the end buyers are subsidised if they buy a VPO house and therefore we are going to see some developers reconverting certain developments into VPO projects throughout 2008. This will take off, dependent on the price that the government establishes for VPO, and if it is economical for the developer.”One of Spain’s largest developers, Martinsa-Fadesa, has already taken this step and is offering 47 units in its Costa Esuri project in Ayamonte, Huelva to domestic first time buyers after an approach by the region’s Socialist government.The arrangement with Ayamonte City Council will offer “advantageous financing conditions” to young professionals under the age of 35 who are on low incomes and residents in the area. Those eligible can rent the property at €450 per month after which time they can buy the property at the same monthly rate fixed for five years.