Crisis forces massive clear out of property agencies

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Half of the 80,000 sales outlets at start of 2007 have closed.

17 January 2008

MADRID - Thousands of real-estate agents bit the dust last year amid slumping sales as Spain's decade-long housing market boom was stopped in its tracks.

The API association, which groups together Spain's real-estate agencies, estimated that out of the 80,000 sales outlets in the country at the start of last year some 40,000 pulled their shutters down.

A number of these were no more than one-man offices with little more than a telephone set up to reap the apparent easy pickings of a market in which, at its height, houses were selling like proverbial hot cakes.

But the slump has also affected some of the larger franchise chains such as Tecnocasa and Don Piso, which are normally staffed by a minimum of three workers.

Many of the real-estate offices which sprung like mushrooms as Spaniards rushed to get a foot in the property market on the back of rock-bottom interest rates now have 'For Let' signs on their doors. As a result, an estimated 100,000 workers in the sector are now kicking their heels in the dole line.

While the market started to slow from about the start of 2006 as the European Central Bank began raising interest rates, the credit crunch that kicked in from last summer in the wake of the US subprime mortgage crisis may yet confound forecasts of a gradual correction of an overheated market.

Amid tighter lending conditions and with house prices falling in some parts of the country, would-be buyers are increasingly wary amid fears they might end up with negative equity and home loans they may be unable to service.

But while real-estate agents are bracing themselves for an even tougher time over the next few months, some of the more well-established agencies have welcomed the clear-out of the one-man hole-in-the wall operators.

[Copyright EL PAÍS / Luís Doncel / Adrián Soto 2008]

Subject: Spanish news

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