'Labaro has been dragged into a situation of a lack of liquidity as a consequence of the crisis affecting the property sector since the second half of last year,' Labaro said in a statement that provided no financial details.
'Labaro will negotiate with its creditors to revise its business plan and adapt its payment schedule to the new situation in the market, to avoid the value of its assets being affected by the current lack of liquidity.'
The group was founded in 1987 and specialises in home sales and land management. It turned over 95 million euros ($149.9 million) in 2006 and posted a net profit of 9.7 million, according to its website.
Unfortunately it is a sign of the times. In the last couple of weeks, a swathe of property companies have filed for administration, as sales with which they expected to pay off debts have dried up.
Many others are in talks with banks to try to restructure loans rather than declare bankruptcy and have to sell assets at knock-down prices, which could worsen the problems of the sector that has suddenly slowed down after a decade-long boom.
But problems in the Spanish property market are not affecting the whole country. Some parts of Spain are currently dealing with a drop in demand from foreign property buyers, while the credit crunch is slowing down the overall rate of house price inflation but it is not a uniform trend.
Liam Bailey of Knight Frank says house prices went up by varying amounts across Spain last year. 'Madrid saw rates below two per cent, but this contrasts sharply with 8.1 per cent growth in Murcia,' he commented. Experts believe that lifestyle buyers do not need to worry about market performance and can purchase when and wherever they wish.
And according to A Place in the Sun magazine, Spain is still the most popular location among overseas property buyers in the UK.
