More Doom and Gloom for Spain

[omostra06]

Just to add my bit,
we are a licensed estate agent based in Portugal, so far the 40 percent of our sales that is made up from uk buyers has not been affected by things going on in the uk, but we are planning ahead, if there is a slow down then we hopefully will not feel it as we are allready working harder and marketing more to other different overseas markets.

I do feel the main reason we have not experianced any change in the numbers from the uk, is that people coming here are buying for a lifestyle change, or retierment and dont worry to much. also as we have had a very stable market here in portugal, no major rises or falls, people feel safe investing here, hopefully none of the sudden shocks that other property markets in Europe have experianced.

[tony ben]

Originally Posted by andyk2

"You must be joking right? pleassssssssssssssssssssssssssssssssssssse dont be a full.

With the UK pound losing value to the Euro no Uk buyers in their right mind will invest in Spain at this moment, instead they will wait until the prices half."

If any agent is relying on the UK market to provide their sole business, they deserve to have their doors shut!

Your negativity translates into complacency. Learn Spanish and sell to the Spanish. Advertise your properties in regions not affected by the alledged "credit crunch". If you want to be a success in this industry, stop slagging it off and put some effort in!

(and) be lucky

Martinsa Fadesa files for administration

By Mark Mulligan in Madrid

Published: July 15 2008 12:15 | Last updated: July 15 2008 12:15

FT.com / Companies / Property - Martinsa Fadesa files for administration

One of Spain’s largest property companies on Tuesday filed for creditor protection owing €5bn, spurring a Madrid stock market sell-off and forcing banks to admit to an initial €550m in related bad loan provisions.

Martinsa-Fadesa said in a regulatory filing it had lodged a petition for court administration, marking the start of Spain’s largest bankruptcy process since the introduction of new rules in 2004.
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It follows the rescue in March of Inmobiliaria Colonial by creditor banks, which swapped debt for equity held by the controlling shareholders in Spain’s second-largest real estate company.

After about a decade of booming activity, Spain’s residential housing market collapsed last year amid rising interest rates, oversupply and tougher lending conditions. Many small construction companies and property developers have either filed for protection or been absorbed by larger groups. The number of companies entering administration this year has more than doubled compared with 2007, according to lawyers.

Suppliers, meanwhile, have been downsizing. Roca, which makes bathroom equipment, announced this week it was laying off 400 workers. The downturn is also pushing up non-performing loan quotients at Spanish banks, forcing them to step up provisions.

Banco Popular, Spain’s third-largest listed bank, said on Tuesday it had already set aside €100m against its exposure to Martinsa, which it would not quantify. Shares in the bank closed down 9 per cent. Caja Madrid, the country’s second-largest savings bank, is understood to have made provisions of €250m, while La Caixa, the largest, said it had set aside €192m to cover its €700m exposure to Martinsa.

The distressed property company, created through Martinsa’s debt-financed €3.5bn takeover of Fadesa last year, said on Tuesday its board had decided late on Monday to file for administration after failing to raise the €150m of fresh equity needed to complete a €4bn debt refinancing with banks.

Its search for the funds included a petition to a government credit agency that helps small, innovative businesses and artistic ventures such as film production.

Martinsa told regulators it had insufficient cashflow to meet interest payments and pay suppliers. It blamed the “clear recession that the Spanish economy is suffering at the moment”. However, it said it remained “viable”, with assets valued at €10.8bn at the end of last year. Analysts, however, said a land bank valued at €6.6bn by independent consultants, was worth a fraction of that in the current market.

Martinsa’s filing added fuel to a heavy sell-off on the Madrid stock exchange, with Spain’s highly-leveraged construction, infrastructure and property groups suffering the most.

Ferrovial closed down 7.4 per cent, while Sacyr Vallehermoso lost 8.4 per cent. Inmobiliaria Colonial dropped 11.6 per cent

[Damian George]

How vulnerable are Spanish banks?

Spanish Property prices falls and slowing GPD could have significant effects on Spanish banks. Over the last decade, the share of property loans has risen from 40% of total private non-financial sector loans to 60%, equating to a staggering €1 trillion, around 100% of GDP and a third of banks’ total assets.

If GDP falls as Capital Economics predicts, bad debts could treble, but it does not expect this to cause major problems for the banking sector. While the figures initially look serious for banks, the quality of their assets suggests things may not be quite as bad:

- Spanish banks have generally not been involved in the type of sub-prime lending that crippled the US.

- The average loan-to-value ratio (LTV) does not appear to be worryingly high, and unless house prices fall very sharply negative equity should not be widespread.

- The Bank of Spain has prevented banks using off-balance sheet vehicles.

- 20 percent of Spanish banks’ lending is abroad and regarded as having a low default risk.

- 80% of banking lending is still financed by retail deposits (compared to Northern Rock’s 30pc in spring 2007).

if you want to read more - Spanish Property News

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If the downturn is more major than predicted this will cause problems. A combination of slowing economic activity, falling Spanish house prices and rising unemployment could result in a considerable increase in bad debts.

[Damian George]

Spanish property prices have fallen by 30% say estate agents

Spanish property prices have fallen by 30% since Spain’s economic downturn began last year, says Santiago Baena, president of the API real estate agents association (Colegios Oficiales de Agentes de la Propiedad Inmobiliaria).

Speaking at a recent conference on Spain’s property crisis, and reported in the Spanish press, Baena said that the adjustment in Spanish property prices currently underway is brutal, and that the situation this year is radically different to last year, when the sector was already absolutely paralysed.

Read more at at our Internantional Mortgages Blog

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[aztec]

Originally Posted by roxanne

hello,
The development we are working on at the moment is a group of 31 townhouses they are in San Miguel de salinas,Alicante,Costa Blanca.
They are 110m2, 3 bed,3 bath with underground parkings and 25m2 storerooms.
We have 2 seperate valuations on them at 293,000€ and 288,000€,the bank will release them all togethether or at the individual price of 176,000€.
I will email details to those who have asked.
We do deal with a developer that has people defaulting on their completions of purchase contracts,i will ask my colleague who deals with this for his advice.
Thank you

Hi Roxanne,
We could be interested please send details,
Aztec

[Tangier]

Originally Posted by roxanne

Hi My name is Roxanne,
I work as an intermediary with the Spanish banks,we have numerous developments that we have to move constantly because developers are defaulting on the mortgage payments.
One example is a development of 35 townhouses that we can release for 59% of current value.
If anybody has an outlet we could work well together.

can you give me more infor

[Denis1]

Hi,
I have to invest in real estate will it be safe to invest in Spain ?

[rolls]

Originally Posted by Denis1

Hi,
I have to invest in real estate will it be safe to invest in Spain ?

Hi Just do your homework ! Plus If you are expecting a fortune overnight forget it. Murcia regions seem stable .I was in Pilla de la horadada last week if anything prices are stable and rising . But its the old saying If you have cash on the hip you can buy the bargains . If you have not bought in Spain before just get a decent man to check everything out to make sure all is kosher.

Regards, John

Euro select estates sl.

[OwnerInvest]

I was watching a Spanish minister on the TV discussing when he thinks house prices will level or rise again and he seemed to think that in 2011 we will stop feeling the pinch so much - a few months is a bit optimistic as someone has already said.

We bought back end of last year and although we didn't get a bargain we did make a saving, we are not sure if that was a bad time to buy or not.

The plan was to take the equity from our first house (mortgage paid) and then buy the next (as we did), however, rents dropped quite a bit when we were ready to let it out (4 months after moving) so we moved towards holiday letting instead of long terms lets.

We have been inundated with enquiries and bookings so we are pleased with that, due to the credit crunch we did think we would come un-stuck and then have to sell one of the houses at a big loss.

I think we all have 2 hard years ahead of us but I am ever the optimist and hope that it rides out a bit easier

[rowlandsbb]

Good to hear that it has turned out OK.......maybe 2011 or some say 2010 but now is a good time to buy
As you say you may not get the bargain of a lifetime but provided you are sensible then you will get a good deal now

Let us say you buy a 2 bed at Polaris World for 119.800 € now due to be ready in say Jan 2010...OK they are building fast so may be late 2009
Keep it and enjoy it for several years so by 2015 you decide to sell. and upgrade. perhaps time to retire to a villa .....most of Condado now complete........going to be very popular and a nice place 7 years hence!!!!

Does anyone think that it will not be a good buy.........buy a caravan or lodge in UK for same price and it will be worth nothing......buy a time share or 1/4 share...same applies
Not just PW but lots of other good locations and builders

As it happens I am backing my views with my own money!

So if anyone want a life style buy and some professional help in Spain between Alicante and Mojacar.......get in touch

PS Not just a post I have bought and not just for own use!