Real estate Annual Report 2001
After years of sustained growth in business volume and
earnings, Ferrovial's real estate division is
one of Spain's leading home builders. Ferrovial focuses primarily on building
first homes— developed directly or
via condominiums—as well as on managing the urban planning process
and property assets. Competitive
Situation With the economic slowdown, demand
for residential property is declining gradually.The trend started
in 2001, when some of the factors that drive housing demand began to show
signs of exhaustion: job creation
and real household incomes both slowed, and
home affordability worsened.
Property market sources estimate
that about 900,000 homes changed
hands in 2001, a 10% decrease on the
2000 figure. As a result, the time taken
to sell property
developments lengthened
as the year wore on.
Additionally, although developers and
builders continued to register growth,
they reduced the number of housing starts
to close to 500,000 units, i.e.
15% less than in 2000 but nevertheless
higher than the figure registered
in previous crises. The
slowdown in housing
starts is much
more accentuated
in coastal areas. A total of 375,000 housing starts are projected in Spain
for 2002. Apartment prices, however, are
still rising due to strong demand, the shortage of building land
and higher construction prices. Prices reached an
average of €1,094/sq. meter of
building at the
end of 2001, i.e. a 15% annual increase. Because of the intense
price rises, the degree of ‘02
‘01 ‘00
‘99 ‘98
‘97 ‘96
‘95 ‘94
‘93 594,820
558,260 463,099
368,259 306,562
330,261 294,287
(*) 495,000 (*)
375,000 Housing
starts in Spain Source: Ministry
of Development 234,864
