Buy Abroad News

22 Dec 10

Spain Property In The Doldrums

Fears continue over the health of the Spain economy and specifically the property market which has taken a hammering over the last year.

There is no sign of a pickup in prices and if anything we may see some falls as we enter 2011. That’s more bad news for owners looking to bail out of a depressed market but good news for potential buyers who want to take advantage of the hard times.

Michael Cordell from agents Buy Abroad said “It’s the old saying, every cloud has a silver lining. I would say that 90% of the people I speak to on a day to day basis who are looking for a Spanish property, will say that they are looking for a bargain and this news will encourage more speculators to come out of the woodwork and sniff out undervalued houses and apartments, with a view to a long term investment” .

It was also reported this week that Spanish banks are being careful about what value they put on the property they repossess, which is leading to fears that the true cost and scale of the bad news is being hidden.

Several commentators in Spain have already predicted that foreclosures there are likely to triple in 2011.

And another indicator of more trouble ahead is the prospect of Spain’s banks and its government having to raise €73 billion in the first four months of 2011 … The Economist reckons that property in Spain is still overvalued by 47.6%.

Meanwhile another market is starting to see the fallout of the banks. Recently Cyprus banks have started to pursue UK residents through the legal system in the UK for non payment of loans and mortgages.

David Hanscot who purchased a paphos property said “we were considering handing the keys back and walking away from our deposit on the basis that the banks would go to the developer for recompense, however this news makes it clear that we are in it for the long haul and will have to find the money from somewhere to pay the mortgage”.