sam54140

24months to complete ?? do they take siesta 1h every hour or
it's the red tape ?
a villa say EUR 200,000ish 150-200sq m nothing "special" can be built/finished
within 7-12months. ( built by a real mason, needs time to dry but in the Sunshine, it should go fast , and 100% finished)

jackytoo

They won't start immediately, they are just getting in deposits. They rob Peter to pay Paul. Developers are on a winner (if they can sell). All they need is a small investment to cover marketing...and they're off Take AIFOS the now defunct Developer and often in the courts. They were taking 30% deposits with just an option to buy the land and before they had licences to build. I was told that the 30% covers all building costs. The rest was profit!

chopera

They have only just bought the land. It's interesting because it's land that used to belong to the government, which is selling off certain old offices on the cheap in their desperation to raise funds. In this case it's the old offices for urban planning. Then they'll have to finalise plans with the various participants in the cooperativa, finalise designs, get planning permission, get a building license, get quotes from builders, get finance, vote on everything, etc, etc, and then they might start building. They will also have to demolish the old building, lay foundations, including car parks, swimming pool, etc. From what I've seen it takes a long time to put down foundations, then the structure goes up quite quickly, and then it takes a long time finishing off the interiors.

Cooperativas have certain additional risks in that the final price isn't closed (if the majority votes for gold plated garage doors then everyone has to pay for them) they can take long time to complete, and there is a risk of your money being tied up for years on end, or disappearing to somebody's offshore account (although these days they use special holding accounts). The upside is the price is the land cost plus the build cost only - there is no developer/middle man taking their cut.

guirijohn

There will always be preference to build new homes. The construction activity boosts reported GDP figures over a couple of years as wages and profits are earned and spent. The catch is that this growth is paid for over 25 years as the house buyers repay their mortgages.

If there is a young and growing population adding to debt can be justified to meet future housing needs and there is time to pay it off. When the country has an ageing and shrinking population and an abundance of vacant property, you have to wonder how the debt will ever be repaid. Much of past house price growth was in fact price and wage inflation, but when there is no inflation the debt does not shrink.