Friday, June 16, 2006

Warning - A very positive comment coming up . . . I asked the most important man on the building site outside my front gate – the chap in the baseball cap with the Stop and Go signs - whether they really were going to chip noisily away until all the granite escarpment was gone. He said they were only widening the road by a couple of metres and that the new houses would be built on what’s left of the granite. I can’t wait for the pile-driving prior to the sinking of the foundations but at least my estimate of the lead time for construction has now reduced from 4/5 years to merely 2/3.

During this period, the houses will be bought and sold ‘off plan’ at least once, by property speculators. In fact, I read only yesterday 9% of homes in Spain are empty because they’ve been bought purely as an investment. This, of course, is because the EU’s low rate of interest is out of kilter with Spain’s inflation and so property is about the only honest way to get a real return on your money. But it does nothing to help Spain’s already difficult rental market. And the resulting ‘bum construcción’ has taken the prices of houses/flats increasingly out of the reach of first time buyers. Luckily for them, parents in Spain are used to subsidising their kids until they’re in their 30s. Or even their 40s.

Just in case you didn’t understand the Spanish phrase in the last paragraph, here’s a clue – It’s reported today that the high levels of immigration into Spain have caused a ‘baby bum’. In 2005, Spain had a fertility rate of 1.34, up from 1.33 in the previous year. This doesn’t sound like a major difference but it meant 11,025 more babies, largely thanks to the labours of Ecuadorian and Moroccan women, it seems. Despite this, Spain still falls below the EU average of 1.5 and is well beaten by Ireland (1.99), France (1.90), Finland (1.80) and Sweden (1.75).

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