Once the centre of the European property and holiday home market it seems as though Spain is going though a very difficult time at the moment. Rising debt, rising unemployment and a whole host of issues in the building industry have come together to kill the property market stone dead, but are things really as bad as they sound?
The thread brings a few interesting points into the equation, not least the fact that there are thousands of unsold properties in the region. This has led to problems in the estate agency industry with more businesses than ever closing their doors, thereby reducing the potential sales teams when the market picks up. The Spanish government are also reported to have increased the country’s debt to over £300 billion, a move which will have an impact upon government spending in the immediate future.
On a more upbeat note there are a few posters suggesting that a number of developments are up for sale at a fraction of the original selling prices and there does seem to be some interest. However, the Spanish property market seems to be making a bad name for itself at the moment with many investors being left with partly finished properties as substantial numbers of construction companies hit financial trouble – in line with the sector in the UK.
There is a mixed feeling as to whether the Spanish property market has bottomed out but it would seem unlikely we will see any major recovery until the European and Worldwide economies start to improve.
Like so many property markets around the world Spain is struggling to recapture the heydays of years gone by. Once the only market which British holiday makers and property investors were prepared to look at it seems that the emergence of other markets in Europe, together with the ongoing credit crunch, has brought the Spanish property market to a halt. There are also concerns that the growing number of unfinished developments will see future investors showing extra caution at what is being seen by some as a throwback to the earlier days of the market when the property sector was dogged by unfinished properties and bad investment advice.
The thousands of unsold properties and the dying estate agency sector is a major concern for investors now and in the short term. There were a number of comments on the post about property developments being sold for a fraction of the original price in order to bring in funds as well as a number of construction companies going into administration and bankruptcy. Interestingly we may well be seeing the ‘panic selling’ scenario which is often the first stage of a recovery and could mark the bottom of the market – or near bottom.
Like so many investment markets it is often the time to look again when EVERYBODY is saying the market has further to fall. How many times have we seen property markets fall just as EVERYBODY is saying it is time to buy?
Spain will always be a very important market to the UK expat community and while the currency exchange rate is not helping in the short term there is no doubt that some investors are on the prowl for value investments at distressed prices. Spain is an interesting market and one worth keeping a very close eye upon.