Spanish Housing Re-Plunging
Posted 15 March 2012 - 05:04 PM
'The crash in home prices in Spain is re-accelerating. Bloomberg data shows the drop in Q4 as the third worst drop YoY ever and the fastest rate since September 2009 taking prices back to March 2005 levels. As WSJ reports, Spanish banks hold more than EUR400 billion worth of loans to the construction and real-estate sector, back by collateral that is now losing value at almost record paces. Is it any wonder that the banks are seeking state-guaranteed debt issuance (as no-one will touch them directly) as "the outlook remains bleak, with the demand for housing expected to shrink throughout 2012 with debt-laden households struggling to cope with a devastated labor market and limited access to credit." Perhaps today's disappointing Spanish auction (weak demand) is the first reality-seeking canary in the LTRO-enthused coalmine of Spanish and Italian self-dealing as the real-money vigilantes start to bet actively against Spain in favor of Italy (which trades tight of Spain for the first time this week since August). Spanish banks need more cowbell LTRO (but what collateral is there left) to fund more support for their local govvies.'
'Spanish house prices tumbled at their fastest pace on record in the fourth quarter, a sign that a long-running property bust will continue to weigh on Spanish households and banks.
House prices fell on average by 11.2% in the fourth quarter from the same period a year earlier, well below the 7.4% decline in the third quarter, while prices of used homes was down 13.7% in the period, the country's statistics agency INE said Thursday.
Both readings are by far the worst since INE started recording countrywide prices in 2007, the peak year for Spain's decade-long property boom. Previously, annual price declines had bottomed out at 7.7% in 2009, and analysts say house prices have only rarely fallen year-to-year since at least the 1970s.
The drop indicates Spanish property prices are now correcting at a similar pace to that seen in the U.S. soon after the 2008 financial crisis, and may fall further at least this year. In previous quarters, price drops were somewhat contained, the result of support efforts by the government and banks, fearful of the effect of a housing collapse.
Spanish banks hold more than €400 billion ($521.32 billion) worth of loans to the construction and real-estate sector, backed by collateral that loses value as property prices slide further. The amount is equivalent to around 40% of Spain's gross domestic product.
Raj Badiani, an economist at IHS Global Insight, said government data indicates Spanish house prices are down more than 20% from the 2007-2008 peak, even though other evidence points to a possible drop of more than 30%. '
oh dear oh dear.........who could have foreseen this coming?thank heavens our CB's aren't loaded up with dodgy collateral........collateral crisis,what collateral crisis????
he tips hat to HAM and exits stage left.
Posted 15 March 2012 - 05:25 PM
Another 5 people in the same block are trying to sell, one person has undercut by about 50k....still no sell.
Their big problem would be if Spain leave the euro.
They are now happy to sell at any sensible price...their sensible price is probably a lot different from a buyers sensible price.
Reality must hit the UK soon, everyone knows someone now that's loosing out on housing. No one talks about buying now. No one mentions BTL ( unless it's a sandwich ).
The boom years are gone, well and truly gone.
Anyone know how Bulgaria is faring ?
This post has been edited by TheCountOfNowhere: 15 March 2012 - 05:26 PM
Posted 15 March 2012 - 09:34 PM
he tips hat to HAM and exits stage left.
Why? Anything going on between you two that we should know about?
The people closest to you have been trying to tell you that you have made a difference. That you did change things for the better. The Universe is vast and we are so small. There is really only one thing that we can ever truly control - whether we are good or evil.
The political triumph of the American Right has been to advance relentlessly the economic interests of the country's richest people, while emphasising a swath of moral, social and foreign policy issues that motivate and certainly distract middle-class and poor voters.