Friday, June 16, 2006

Cement Works

A report released this week by the Spanish government shows some staggering figures on construction in the country in recent years. It estimates that the constructed surface space in Spain has increased by 40% in 15 years, and identifies the Mediterranean coast, together with Madrid, as the main focal points of this boom. Spain now has 1 dwelling for every 2 inhabitants and is adding over 800000 new units every year. Last year’s figure for new construction exceeds the combined total for Germany, France and the UK. The report highlights the paradoxical situation that leaves many people unable to afford a new home because of the rapid rise in prices, at a time when record numbers of new buildings are appearing. Here in Madrid entire districts, each with thousands of homes, have been added to the outskirts of the city in the last few years, but the prices have continued increasing.

On the Mediterranean coast, especially in Valencia, Murcia and parts of Andalucia, the first kilometre inland from the sea is now entirely constructed in large areas of these territories. Part of the problem lies in a system of local government financing that means a large part of income for service provision comes from reclassifying land for construction. Mix this with a huge quantity of undeclared income in circulation (For A Suitcase Full Of Euros), lax controls on corruption in local government, and the desire of so many people inside and outside of Spain to have a place by the beach, and the boom keeps on going. Valencia and Murcia are regions that have campaigned to have more water resources from other parts of the country redirected to them, notionally to support the tremendous growth in ‘plastic sheet’ agriculture that they have experienced. However, in both regions there is an increasing trend for building urbanisations with golf courses attached, and the reality is that much of their water does not get used for agriculture. Some of these regions have areas that experience semi-desert conditions; sustainability doesn’t seem to be the key consideration. It’s too late to do anything to save large parts of the coastline from being concreted over, although there have been some recent limited successes in stopping construction in areas that are supposed to be protected. The construction companies of Spain are now becoming the big players in the economy, together with the banks that get fatter on the ever higher mortgages that are needed to buy a home. Look no further to find an example of the free market failing to meet people’s needs, the average Spanish salary remains very low while house prices are making parts of Northern Europe seem relatively cheap.

No comments: