16 years after the Great Crisis, banks restart the promoter credit faucet

statistics of bank of spain It shows that loans from financial institutions for real estate development are currently increasing at a remarkable rate. The data for real estate activity financing, including developer credit, is clear. At the end of June 2025, the sector’s outstanding loans had increased to €73,276 million. By comparison, the balance at the beginning of 2024, when the current cycle bottomed out, was €69.235 billion.

Under the influence of so-called economic growth, the growth rate for just over a year was 6%. real estate activities The real estate bubble has been in free fall since September 2009, when it had already burst. In June of the same year, credit worth €324,663 million reached a historic high, but this figure is very different from what we see today.

The real estate crash that year was an earthquake. During the brick crisis, which later became the financial crisis, everything went to waste in this sector. The cranes stopped working, many developers went bankrupt, and the desire to build disappeared. In reality, the drama at the time was that construction costs and mortgage payments could not be continued, the population was losing jobs exponentially, and the country was seeking a bailout from Europe.

The magnitude of the problem can be seen by looking at the credit figures for delinquent real estate activities. The highest amount of these loans reached 324.663 billion in June 2009. As of September 2012, outstanding loans to promoters amounted to €84,989 million, which means that 30% of existing outstanding loans are in arrears. This caused the real estate development sector and some banks to collapse, leaving many other sectors in trouble. In an unusual move, Sareb, a so-called “bad bank”, was launched. This bank assumed the most toxic assets of financial institutions with public debt. promoter credit.

More than a decade later, the sector’s defaulters’ balance is just 1.429 billion euros. This will then restart lending to finance the new demand for the reconstruction of residential buildings in Spain. Bankers acknowledge that credit for real estate development has been (and still is) under scrutiny for years given what has happened in the past. But in any case, they added, lessons can be learned from this after a time when everything was financed, requirements were low and economic growth was unstoppable.

Banking sector stakeholders have confirmed that credit for real estate development has accelerated markedly. And as this is a high-margin business, sources say, although it cuts across sectors. Caixa Bank and Santander Bank Two of the most active organizations in Spain. Still, the sector insists it follows the highest standards when making loans and maintains the utmost prudence in making these loans.

Furthermore, the bank points out that each operation is now being reviewed millimeter by millimeter, as the provision of this type of financing now requires more capital requirements. Precisely because of this cautiousness on the part of the banks, the initial financing of a promotion is usually carried out by an investment fund and then the debt is refinanced, with all licenses, technical requirements and a defined project, to a bank, which takes over the financing through the development and subsequent sale of the promotion.

soil problems

Similarly, financial institutions claim that credit is flowing smoothly again due to promotions as demand has reinvigorated. It is even more important that everyone has come to the table with the diagnosis that Spain’s big housing problem is one of supply, and that prices are soaring because they are not matching demand. A diagnosis in which the Bank of Spain, the organization itself, the analytical institutions agree…

In this sense, even if the promotional achievements are at a low time, it is also Shortage of land for final candidates Building permit numbers are six to seven times lower than during the golden age of brick. Last year, 127,721 new home construction permits were registered, an increase of 17% from the previous year, making it the best year since 2008, but far from the historic peak of 2006, when visas were issued at 865,561.

This is a major issue that the promotion wing had hoped to unblock by approving land law reform, but the PSOE withdrew from the House of Representatives conference last year citing lack of support. The new provisions, approved by businessmen, aim to give legal certainty to town councils’ plans and avoid getting bogged down in court in the event of an appeal. According to calculations by the Association of Promoters of APCEspaña, around 100 municipalities are currently affected by this paralysis.

According to the association’s calculations, in Spain it takes on average 10 to 15 years to transform land intended for construction into a residential product. 700,000 units The Bank of Spain said this was to cover an existing deficit for the annual increase in the number of households. Meanwhile, promoters estimate that the housing shortage could reach a total of 2.74 million units over 15 years, which would put Spain on the verge of a complete housing collapse.

Regarding financing, the department also believes it is essential to amend the law so that developers can qualify for bank loans when carrying out manufactured housing projects (housing built in factories). This is the most sought-after solution to speed up product development as it significantly reduces construction time.

Indeed, the government is currently looking at this option after approving Perte for Housing Industrialization this year, and aims to provide a €1.3 billion loan from the European Recovery Fund. The goal is to deliver 15,000 to 20,000 manufactured housing units per year over the next 10 years, but the development department is not yet aware of the progress of this project on the part of the Ministry of Housing.