Our resident property expert Mark Stucklin warns the market does not look healthy for sellers in Spain

I should warn you that this month's bulletin offers up some pretty depressing reading for anyone trying to sell property in Spain, though it might cheer up buyers.

Many of this month's news stories entertain a downturn in the Spanish property market, with scenarios ranging from a silky
landing to a perfect storm. That the boom is coming to an end is beyond doubt; no boom lasts forever, and this one has had a great innings, with 10 consecutive years of property price increases.

The Spanish economy has become a bit of a real estate junkie in the boom years, so a dose of cold turkey to get off the bricks and re-balance the economy would be no bad thing.

A downturn might catch short-term property speculators with their pants down, but the rest of us will benefit from a healthier economy in the medium to long term. I'm confident that buyers of quality property for long-term personal use have nothing to fear from this market, and if anything, should see it as an opportunity.

Market news:
What comes after the boom?

Two articles in the FT in March, one by Wolfgang Munchau, and the other by Martin Wolf, look what might happen to Spain's economy if and when Spain's
decade-long real estate boom ends.
http://www.spanishpropertyinsight.com/news.htm#1

Prospects for Spanish holiday homes

According to a March article at Bloomberg.com, holiday home prices in Spain, a leading indicator of Europe's property market, may face a slump that's worse than the real estate decline in the U.S., based on the loan terms banks are imposing on developers.
http://www.spanishpropertyinsight.com/news.htm#2

Market shrinks by 7.4 percent in 2006

'High property prices and rising interest rates sink property market' was one recent headline in the Spanish press, in response to news, from Spain's property registry, that the number of properties sold in Spain fell by 7.4 percent in 2006.
http://www.spanishpropertyinsight.com/news.htm#3

Downturn risk to wider economy

Spain s dependence upon its real estate sector for economic growth, and the wider implications for Spanish economic growth of a property downturn, were in the headlines in March.
http://www.spanishpropertyinsight.com/news.htm#4

Mortgage rates rise again

Euribor - the interest rate most commonly used to calculate mortgage payments in Spain - rose again in March to 4.106 percent (to be confirmed by the
Bank of Spain).

http://www.spanishpropertyinsight.com/news.htm#5

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Copyright Mark Stucklin (Spanish Property Insight)

Mark Stucklin also writes on Spanish property for the Sunday Times
 
[Copyright Expatica]

[April 2007]

Subject: Spain; property market