I am spending the Christmas in a small city of 70,000 people to the west of Barcelona. There are numerous free magazines and newspapers that normally advertise property. Most of the ads have a red line through the prices the new (circa 10-20% lower) price is displayed below. There are also numerous pages advertising advertising space as they seem to have lost over 50% of their property adverts. A walk around the city seems like you are waling around a battle ground. The amount of demolished buidungs it startling. I was told that two demolishing companies got most of the contracts to demolish the cities old building (often beautiful classic Spanish buildings a few hundred years old.) to prepare for new flats. These two demolision companies have been on a spree to complete on all contracts and take in money before their contract were dropped as they along with everyone else knows there are big problems.
On 5 different streets in my imediate area there are blocks of newly built flats which are all suttered up and have en vende signs on each piso. The streets are completly silent, you can literally hear a pin drop. That is something when you consider how noisy the Spainish are.
On TV “TV3” there have been numerous programs about people who have been trying to sell for over a year and not even a visit from a buyer. Also on the News here there are “specials” about people being unable to sell even when they have dropped their prices by 20%.
Before the Credit Crash Spain seemed to be 6 months behind Irelnd in the housing crash scenario. Since the Spainish mortgages use Euribor and 90% are variable they have been hit much quicker by the Credit Crunch. They have caught up with Ireland and by the way things are going here I think mid 2008 will be when all the repossesions and bankruptcies are in full swing.
[*Spain’s house of cards has started tumbling down * (Subscribe to read | Financial Times)
Everywhere you look here you see builders furiously banging away at something. I´m not joking when I say you can see building work taking place on nearly every street. Then you ask any Spanish person about buying property and they´ll shake their head saying nobody can buy at the silly prices and anybody they know can´t sell. This being the case, why all the building work? Most seem to think it is just the momentum that has built up. So many peolpe are employeed in construction that the companies who employ them have to give them something to do or pay them redundancy. Doesn´t seem like they have the money for redundancy, so I suppose work till the construction firm applies for bankruptcy.
Add to this the fact that they are loosing manufacturing jobs left right and centre. Manufacturing moved here to take advantage of the low salaries (cost of living). Now since housing underpins everything and it is stupidly expensive people need great big salaries to live. Of course this means the manufacturing companies are leaving en-mass. A Durex factory close to us here closed up and went to Indonesia last week. Far play to the Spainish though, like the French they don´t take bad government lying down. Unfortunately since the government, like our own, mismanaged the low interest rates of the EU the people here will be paying a big price. Back to the high Unemployment of the early 90s.
Don’t know what you mean, sure they’re hardly building anything around here
Had to laugh at the caveat on the header of the English page:
“This article or section contains information about expected future buildings or structures.
Some or all of this information may be speculative, and the content may change as building construction begins.”
Says it all really!
[*Spain sees credit surge brought to rude halt - FT * (Subscribe to read | Financial Times)
Hmmm. I wonder if we could sell them an option on Country Tom ???
and this looks eeerily familiar .
we are, by my reckoning , some 3 months behind Spain . Thats all !