Over half a million Spanish properties built since 2005 still unsold

As a result of the real estate crisis in Spain, nearly one third of the 1.8 million properties build since 2005 cannot be sold, according to a leading construction association.

The number of property deals has decreased by 60 per cent since September 2007; the decrease in sales of newly built properties began as early as in 2005, says the Association of Spanish Constructors and Promoters (APCE).

Until recently, construction was the moving power of the Spanish economy and a number of other sectors depended on it. The crisis has totally unpredictable consequences for Spain, Guillermo Chicote, president of the Association said.

Most of the newly built properties that cannot be sold are in the provinces of Castilla de la Mancha, Valencia and Murcia. Only in the Canary Islands is demand equal to supply.

Spain's new Housing minister, Beatriz Corredor, has now come up with a plan to tackle the crisis facing the construction industry that she will present to Economy minister, Pedro Solbes, later this week.

Meanwhile Murcia's regional government has frozen plans to construct a golf course and 2,575 properties in Campos del Río, effectively preventing building work beginning on the Trampolín Hills development.

Almost 90 per cent of the properties at the proposed golf resort were sold months ago, despite not having been approved by the Murcia regional government. Interest was high because a home was given away as part of a competition run on Channel 4's Richard and Judy show, which gave the development much of its legitimacy in the eyes of British investors.

However, the development has since been blacklisted by investors as the company has been prohibited from beginning construction until the regional department for public works reclassifies the rural land chosen as the site.

Public works asked Grupo Trampolín to amend the initial plan; including widening the streets and ensuring that the development has a water supply guaranteed by the River Segura Water Confederation. These alterations should have been approved in a full council meeting and then sent back to the regional department but a meeting has never taken place.