Wednesday, 22 August 2012

Spanish property market at bottom of the pit

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Media reporting 'state of collapse' · Cádiz sales at historic low
MADRID The property market balloon in Spain is more than punctured. If you read the national media, paper and online, the language will offer a picture of Daliesque collapse, with deflated balloons hanging from the skeletons of unfinished buildings instead of clocks from tree branches. The latest report from the National Statistics Institute (INE) on the subject, for June 2012, shows historic minimums: only 681 property sales took place that month, 585 of them urban. In June 2011, there were 800 such sales and loud warnings were issued. The figures offer a year on year downturn of 15%. Agents and government bodies confirm that neither rentals nor sales are working,  and estate agents are clinging to the precipice by the fingernails.>>>IN THE NEAR FUTURE YOU WILL NOT BE ABLE TO SEE THE REST OF THIS ITEM UNLESS YOU HAVE SUBSCRIBED. Subscription information will be available soon.
The latest INE report, which gleans its figures monthly from Property Registries, is worrying partly because the numbers run parallel to others of equal concern. One of the major indicators is that regarding mortgages, which will be available in the next few days. Banks and other financial institutions fear it, though it is expected that it will not be quite as bad as last year's. June last year saw a drop from 1,339 mortgages in June 2010, to 790 in 2011. As a comparison: in 2005, at the height of the property market, there were 4,500 mortgages registered by the INE.

Bank loans are also significant, highlighting the downfall in this sector. In a single year, the average mortgage loan plunged from €151,000 to €73,000. As one estate agent in the capital put it: 'If the bank loan tap is closed off, we are in for a very dry time.'

Prices in the meantime, and still according to the INE, have dropped by 7% for new properties and by 11% in second hand homes so far this year.

It seems that each month this year, these kind of figures fall over each other on the way down. Except in one comparatively small section of the market.

Generally termed the 'finca market', sales for rural properties have shown a stability that the rest of the property market might envy. Some 2,200 operations were registered, of which 1,167 were for homes and 102 for plots of land. A combination of both, called fincas rústicas, showed 216 transactions, just slightly above last year's figures.

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