ENCARGOS TÉCNICOS BLOG
BUREAUCRACY AND OVER-REGULATION IN THE REAL ESTATE MARKET
The current situation.
Spain is a country with a great deal of over-regulation and bureaucracy in real estate management. This over-regulation has become a major obstacle to the development of the sector and has largely contributed to the stagnation of housing investment since 2007. This problem is also reflected in the business perceptions survey, according to which the real estate sector ranks last among all business sectors in terms of attractiveness and ease of development.
If we talk about the case in which the developer of the real estate proposal is a private individual, in addition to all the problems that may be associated with the economic viability of the project, he or she faces multiple additional difficulties. Once he has been able to overcome the hurdle of creating a plan that withstands the scrutiny of the bank that will finance it, he comes up against the bureaucracy involved in the whole process.
Managing to comply with all the legal and regulatory requirements that define how a house should be built was not an easy task and has become more complicated and subject to more obstacles since legislation has changed over the last few decades.
In our opinion, this has been done without taking into account the realities of market activity, as it is practically impossible for any private individual to develop a self-build without investing a huge amount of time and resources, which often ends up making the project unviable.
Do you want to build a house? To do so, you will have to go through an arduous process that usually lasts for years, from the moment you obtain the financing and apply for the first permits at the Town Hall, until you can finally dispose of your new property. Not to mention if any other public body is involved, such as the Highways, Coastal or Water Departments. So, we advise you to be patient because it is going to be a long road.
The slowness of the Public Administration.
In order for real estate markets to function properly, we believe it is necessary to promote the simplification of laws and the elimination of duplicate regulations, to help both the buyer and the seller, in order to facilitate the marketing of real estate.
An example of the pernicious effects of this situation could be clearly seen a few years ago, when the 2016 forecasts for construction in Spain were lower than those predicted for 2015, despite the fact that the Government reduced taxes on the purchase of lower priced homes.
For a long time, from certain sectors of politics, it has been insisted that one of the main problems we have is the lack of housing (Spain suffers a deficit of 2 million homes, according to official statistics). But neither the government builds subsidised housing nor does it facilitate its development by private initiative.
It has become impossible to recover the past, when the preponderant role of the Spanish state in the construction and exploitation of urban spaces made it possible to ensure an important public housing stock that provided a service to thousands and thousands of Spanish families, who otherwise would never have been able to own their own home.
In Spain, it takes 6 to 8 months to obtain a licence to build a house. In Italy it takes 3 months, in France 1 month, in England 4 months, in Switzerland 3 months and in Germany 3 months.
The rules that govern our daily life are more than 1000 laws, more than 700 royal decrees and more than 2000 ministerial instructions and 20000 articles of organic law. This disproportionate amount of regulations creates, irremediably, a great uncertainty for our present and our future.
The relationship with public administrations is becoming more and more difficult and the costs increase exponentially during the documentation and processing process.
If you do not have the time to study all these issues or if you just want to avoid all this bureaucracy, Encargos Técnicos can help you.
We provide technical advice and document management for the purchase, sale and rental of all types of properties, we have many years of experience and we will be your guide to help you solve your current problems, as well as any future problems that may arise.