Roof falls in on Spanish property firms
Revenues of seven biggest developers drop by almost 75 percent in the first quarter from a year earlier.16 May 2008
MADRID - The value of properties sold by Spain's biggest real estate developers plunged almost 75 percent in the first quarter from a year earlier as the bursting of the property bubble left real estate agents unable to offload new homes.
After more than a decade of seemingly unending price and sales growth, Spain's seven biggest developers saw the value of sales plummet 73.5 percent year-on-year in the first three months of 2008, with some reporting falls as much as 96 percent.
The plunge, which resulted in combined quarterly revenue for the seven of EUR 299 million compared with EUR 1.13 billion a year earlier, reflects the rapid deceleration in Spain's real estate sector that began last year as the stream of buyers dried up.
With low demand and a large excess of properties - Spain built more homes that France, Germany and Britain put together in 2006 - home prices have started to fall and are likely to drop further.
Developers' woes have been compounded by the global credit crunch, leading the sector to issue an urgent appeal for help from the government this week to ward off further companies going under in the sector, which accounted for 35 percent of all receivership cases in the quarter.
[El Pais / Ángeles Espinosa / Expatica]