Glut of properties for sale in Spain likely to continue in 2010, according to analysts

[Nicholas Wallwork]

Property prices in Spain are likely to continue falling due to rising supply and weak demand, according to a new report.

A growing glut of properties is the main factor affecting the Spanish property market and even although the number of new units coming onto the market is slowing, supply still outstrips demand, says the report from Birmingham based construction, property and development consultants DBK.

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[Resale Centre]

And town halls are still approving plans for new developments in the Orihuela Costa area on the Costa Blanca even though there are thousands and thousands of properties for sale and unoccupied. 4,000 new houses have been approved in the area which they "think" will boost employment in the area, but who is going to want to buy off plan after all of the bad publicity new builds have received and seeing half of the new constructions in the area still half built! Not rocket science is it!

The Spanish government must call a halt to new developments until the resale market is back on its feet - renewing and improving the infrastructure of the costa's is far more important, that will keep the construction industry running for a few years!

 

[rowlandsbb]

There is as you say a very large number of properties on the market and Banks like CAM Bank have to sell their repossessions
Prices from 36.000 € ,30% discounts and 80% LTV mortgages to non residents will help but it will take some time and well into 2011 and 2012
And for the poorer ones some further discounts may be needed
Then there are the part finished developments and second phases etc

But this recession will not go on forever and developers and land owners together with local and regional government must plan for the future otherwise they will be behind when the economy starts to move again

The development process is long winded in most advanced economies and nowadays in Spain all the regulations have to be adhered to!!

So what you are seeing now is advanced planning and the government has to do its part by providing the infrastructure such as roads, sewers, water and the high speed train etc

Perhaps there are signs that the economy is improving. One example is the Oasis Thabernax development at Tabernas Almeria ,which stopped when the banking crisis hit bottom
But now it is restarting, with finance in place and mortgages available by Santander to non residents: prices start at 99.000 € to 250.000 € so it is not an upper market development
And around about you are starting to see ground work starting ready for the recovery

And prices are very competitive and will remain so for some time

 

[advoco]

Everything that's been done in Spain (and the UK and the US for that matter) to combat the crisis has just kicked the central problems - oversupply and overindebtedness - down the line to be resolved another day. Specific actions of subsidising mortgage holders and allowing banks to fudge their bad debts combined with a dramatic loosening of fiscal and monetary policy might have prevented meltdown in 2009 but they also guarantee a further day of reckoning in the future except of course that the next time the government will itself be "maxed out" and unable to save the day.