Tuesday, Mar 26, 2013

Prices to fall in Spain.

Bloomberg: Spain's zombie developers are finally about to die.

Badiani estimates the jobless rate could climb to more than 27 percent this year and house prices will fall at least 50 percent from the peak by 2015.

Posted by will @ 02:13 PM (2420 views) Add Comment


1. pete green said...

I was in Greece last week and saw plenty of this, empty buildings, half finished motorways and interestingly empty billboards and advertising signs. All along the major motorways and in towns and cities all their billboards where empty or had faded peeling advertisements. When you see that in the UK - then we will have an HPC.

The Ghost Town that is Spain:

Tuesday, March 26, 2013 03:05PM Report Comment

2. will said...

Pete @ 1

50% drop in UK housing transactions since 2007, and houses are only affordable in London with 'interest only' borrowing. We don't need advertising signs to point out the mess the UK is in. Most potential buyers have given up.

Tuesday, March 26, 2013 03:10PM Report Comment

3. alan said...

From the article:
"Spanish lenders, ordered last year to set aside provisions of 84 billion euros to cover anticipated real estate losses, have no incentive to keep unviable builders afloat after they've accounted for losses from 280 billion euros of their loans". Spain built 675,000 homes a year from 1997 to 2006, according to a report by a unit of Spanish savings bank Cajamar. That's more than France, Germany and the U.K. combined. The frenzy resulted in a surplus of about 2 million empty homes that will take between seven and 13 years to absorb".

.....the pain in Spain.

Tuesday, March 26, 2013 03:11PM Report Comment

4. mark wadsworth said...

The problem here is "agglomeration"

No one individual wants to move into those blocks of flats if the others are empty, as tempting as the price might be

What it requires is a couple of thousand people to snap up a cheap one each and then it will all sort itself out. The tricky bit is that the current owner of those two thousand part finished flats will smell a rat and bump up the price, because the more of them he has sold the more the remaining ones are worth.

Or just slap the owner with LVT and it will sort itself out, of course.

Tuesday, March 26, 2013 03:36PM Report Comment

5. pete green said...

Will @ 2 I should of elaborated that ghost towns and the empty billboards are lagging factors in economic activity, Drop in transactions is a 'leading factor' in normal economic systems. But our political class want all housing to be interest only to squeeze every last drop of 'economic rent' from us. London is the rent seeking capitol of the world and our bansksters must demonstrate their complete control of the UK economy to make their 'investors' park their money in the London Tax Haven.

London will be the last bastion of the rent seekers and I fear they will resort to ever more desperate measures to save their grotesque financial pyramid before we see the House Price Crash, and when it does happen many of us will be in no position to benefit from it, as we will be too busy scratching enough together to feed our kids, and even then the rent seekers will not get off our backs.

“I sit on a man's back choking him and making him carry me, and yet assure myself and others that i am sorry for him and wish to lighten his load by all means possible....except by getting off his back.” Tolstoy

Tuesday, March 26, 2013 03:45PM Report Comment

6. will said...

Pete @5

'and the man carrying the sick one, will surely die' Will.

Tuesday, March 26, 2013 03:55PM Report Comment

7. timmy t said...

UK would be the same if we built as much as a lot of people want. There are far more sensible ways of getting house prices to come down - which is actually what we need.

Tuesday, March 26, 2013 04:22PM Report Comment

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