Cookies on the this website
We use cookies to ensure that we give you the best experience on our website. If you continue without changing your settings, we'll assume that you are happy to receive all cookies on this website. However, if you would like to, you can change your cookie settings at any time.
Continue

New to PropertyWire?

Welcome, and thank you for visiting our website.

PropertyWire is the leading publication for property investors and industry professionals interested in the world of international property investment.

Our aim is to give you intelligent commentary and analysis on the world of retail and commercial real estate.
If you've enjoyed what you've read so far why not sign up for our FREE property alert and online magazine PropertyWire Confidential.

Every week the PropertyWire team sends out a hard-hitting newsletter packed with news and analysis of the top stories plus the best investment opportunities on the market. We always look at the bigger picture like the Euro Crisis, and explain how this will affect YOUR investments.


Ask me later
No thanks

Mon
Jul 28th
Lost Password? Register
Home arrow News arrow Europe arrow Property market outlook for Spain is poor

Property market outlook for Spain is poor

Tuesday, 21 October 2008
Spanish property prices could fall 50%
Spanish property prices could fall 50%

Property prices in Spain could fall as much as 50% over the next three years it is claimed as more developers suffer severe financial problems.

Like many economies, property sales and lending have collapsed in Spain but the situation is compounded by chronic overbuilding and opinion is divided over whether the country will slip into recession.

The most pessimistic outlook comes from Javier Ortiz, financial director of real estate organisation Grupo Inmo. 'If developers don't sell their flats 25 or 30% cheaper now, in two or three year's time they are going to have older, unmarketable properties,' he said. These properties will then be more expensive due to financial costs and 'they'll be forced to sell at 47% cheaper in real terms,' he added.

Two more leading developers are in crisis. Restaura SL (part of the Restaura Group) and Strength, have been forced to seek court protection from their creditors.

Restaura SL specialises in buying, refurbishing and reselling residential buildings in prime city locations, mainly in Barcelona. It has bought and refurbished some of Barcelona's landmark historic buildings and many of its clients are international investors.

The company, which has debts of €237 million spread between half a dozen banks and savings banks, is part of the Restaura Group, which has debts of €1.6 billion. Due to a lack of financing it has been unable to close crucial sales in recent months.

Restaura SL is also regarded as a victim of its own ambition, having expanded too quickly during the boom. Restaura, which has offices all over Spain, also opened offices in France, Germany and Poland.

The real estate developer Strength, which specialises in building holiday homes around Catalonia, has €100 million Euros in debts.

The International Monetary Fund said it expects Spain to move into recession in 2009. But the Spanish government is forecasting 1% growth. What happens is crucial for the property market as without economic growth there is no job creation, and without new jobs there are fewer buyers to help mop up Spain's monumental housing glut of over a million homes, many of them new.


BOOKMARK THIS PAGE (What is this?)     Digg!Reddit!Del.icio.us!Google!Live!Facebook!StumbleUpon!Newsvine!Furl!Yahoo!

 
Related News
More Recent News
Earlier News
To see all the latest news articles in our monthly online magazine, Property Wire Confidential, sign up free here



Europe: Top Headline

Fewer people in UK think it is a good time to buy a home, new survey revealsFewer people in UK think it is a good time to buy a home, new survey revealsFewer people in the UK think the coming months will be a good time to buy a property with more than half believing it is a good time to sell, the latest confidence tracker report shows.



West Tower

West Tower

Car park

home rental guide

Limousin Guide

Barratt Homes

Limousin Guide

West Tower

Search for Properties:

Feature story

Student accommodation investment check List

It’s the UK’s strongest asset class, but are all student accommodation properties good investments? This is the comprehensive list of what to watch out for when buying student property.

 

Company news

First women president for RICS

Louise Brooke-Smith has become the first female president of the Royal Institution of Chartered Surveyors (RICS) in its 146 year history.

Finance Update

Halifax and Lloyds mortgage range changes

Home owners are now able to purchase new build properties through both Halifax and Lloyds Bank Help to Buy Mortgage Guarantee scheme products.

Features

Student accommodation investment check List

It’s the UK’s strongest asset class, but are all student accommodation properties good investments? This is the comprehensive list of what to watch out for when buying student property.

 

Newsletter

Subscribe to our weekly newsletter and stay updated on the property market trends.
Subscribe now >>

Subscribe to our Europe property and real estate news feed (RSS)