jorida

Spain Crumbles

As a Belgian, having lived in the States and Belgium, and now retired at the Spanish coast and prospecting the market for a friend let me add some comments.
By repossessing defaulting properties the Spanish banks are now the largest owners of real estate that they want to get rid of and sell for the value of outstanding debt. Unless initially over appraised there are some opportunities. Commercial property, eg offices are sold with a garanteed return of 5 to 7%.
High end properties (over 1 million Euro and well situated and finished) up to now have not lost that much in value. Owners, unless forced to sell, keep properties hoping for better times.
Middle and low end properties are on sale.
The number of real estate agents has strongly decreased. Those remainig get a bigger share of a much smaller pie and new construction sites are rare.
Spanish banks, although suffering, are in better shape than banks in other European countries because better capitalized and less contaminated with US rubbish. No major bank has defaulted nor received state support, untill now.
The strong Euro is a major handicap for citizens outside the Euro zone although Russians pick up pricey properties.
The strength of the Euro puzzles me given the near bankruptcy of the social security system throughout the continent and the incapacity of any governement to take remedial action, the crumbling economy and non competitive industry strangled by unrealistic demands from worker unions , an aging and decreasing population inundated by refugees from the third world.