TruraBuoy Posted May 26, 2009 Share Posted May 26, 2009 Bloody Hell! Let me quote from the very interesting study the team at Variant Perception did."As we have repeatedly said, Spain is set for a long, painful deflation that will manifest itself via a spectacularly high unemployment level, a real estate collapse and general banking insolvencies. Consider this: the value of outstanding loans to Spanish developers has gone from just €33.5 billion in 2000 to €318 billion in 2008, a rise of 850% in 8 years. If you add in construction sector debts, the overall value of outstanding loans to developers and construction companies rises to €470 billion. That's almost 50% of Spanish GDP. Most of these loans will go bad. "Spanish banks are now facing a very bleak outlook. Spain's unemployment rate reached over 17% last month; there are now four million unemployed Spaniards and over one million families with not a single person employed in the family. Spain and Ireland had the worst housing bubbles in the world and now Spain has as many unsold homes as the US, even though the US is about six times bigger. "Why are Spanish banks not insolvent? Spanish banks are not marking their real estate loans to market. We've often wondered how it is that our thesis for Spanish real estate and industrial collapse has not created more victims. The answer is simple according to an article in Expansion, the Spanish equivalent of the Financial Times, from the 19th of April titled 'Spanish banks control half of all real estate appraisals.' You can't make this stuff up. We haven't even begun to see the worst in Spain yet." Linky http://www.moneyweb.co.za/mw/view/mw/en/pa...6&sn=Detail Quote Link to comment Share on other sites More sharing options...
VeryMeanReversion Posted May 26, 2009 Share Posted May 26, 2009 Bloody Hell!Linky http://www.moneyweb.co.za/mw/view/mw/en/pa...6&sn=Detail As long as they banks buy a house once in a while at a high price, they can claim they a valuing their assets at market prices VMR. Quote Link to comment Share on other sites More sharing options...
Deckard Posted May 26, 2009 Share Posted May 26, 2009 'Spanish banks control half of all real estate appraisals.' Yep, and it's even worse in Ireland... Quote Link to comment Share on other sites More sharing options...
The Masked Tulip Posted May 26, 2009 Share Posted May 26, 2009 Yep, and it's even worse in Ireland... I am so glad that everything is OK here in the UK and that we have none of these problems Quote Link to comment Share on other sites More sharing options...
mattyfc Posted May 26, 2009 Share Posted May 26, 2009 I have been going on about this for months. Even our house bubble pales in to comparison when you look at the Spanish housing market. Talk about about a slight supply overshoot. Already 4m unemployed 17.4% and the recession is just getting started. 90% Falls from peak anyone? The next financial crisis will probably occur in Spain. Probably a good bet on them leaving the euro in the next 5 years. Quote Link to comment Share on other sites More sharing options...
cashinmattress Posted May 26, 2009 Share Posted May 26, 2009 Probably a good bet on them getting the boot out the euro in the next 5 years. Corrected for you. Quote Link to comment Share on other sites More sharing options...
Executive Sadman Posted May 26, 2009 Share Posted May 26, 2009 How on earth do companies like Santander keep going? Or have they been bailed out too? Quote Link to comment Share on other sites More sharing options...
yodigo Posted May 26, 2009 Share Posted May 26, 2009 Almost every Spanish village and town has new build housing. My ex g/f rents a house in a village of 500 people, must be 30-40 new builds there alone. Not all are sold, and this village is about 1 hour from Barcelona. The building mania in Spain went on >everywhere<, not just on the costas. Quote Link to comment Share on other sites More sharing options...
cashinmattress Posted May 26, 2009 Share Posted May 26, 2009 Spain's scenic seaside and countryside have been blighted with these sub-standard flats/houses; a lot of which do not have formal building permissions mind you! All those people we witnessed on the television over the past few years dropping £100's of k's on these very poorly built cement block and clay dung heaps will be feeling the pinch. Fook em for being so thick skulled. It's been a fabulously perpetrated con, preying upon the greed and naivety of the greater British population. Shakespeare couldn’t have devised a better tragedy. Quote Link to comment Share on other sites More sharing options...
Abstra Posted May 26, 2009 Share Posted May 26, 2009 Does this mean they would accept say £5 K to sell us Abbey National back from Santander. Quote Link to comment Share on other sites More sharing options...
Executive Sadman Posted May 26, 2009 Share Posted May 26, 2009 Some good charts on that link too. Shows that against a bunch of countries with different currencies, it looks like devaluing has had absolutely no beneficial effect on our exporters. And probably a huge negative effect on our consumers. Quote Link to comment Share on other sites More sharing options...
weimarener Posted May 26, 2009 Share Posted May 26, 2009 Spain's scenic seaside and countryside have been blighted with these sub-standard flats/houses; a lot of which do not have formal building permissions mind you! Where do you get this info from? source for this sweeping statement... Quote Link to comment Share on other sites More sharing options...
Gone baby gone Posted May 26, 2009 Share Posted May 26, 2009 When I can buy a small flat for the price of a new car, I'll be in like Flynn. Quote Link to comment Share on other sites More sharing options...
catara Posted May 26, 2009 Share Posted May 26, 2009 Where do you get this info from? source for this sweeping statement... Source??/ Just google Spain and illegal buildings and 100K of links will appear. Quote Link to comment Share on other sites More sharing options...
cashinmattress Posted May 26, 2009 Share Posted May 26, 2009 Where do you get this info from? source for this sweeping statement... I am thinking this is pretty common knowledge by now. See for yourself. Here is what 1 minute of google'ing pulled up... http://www.illegalvillasspain.com/index.html The worst possible start to a new life and a Spanish dream With more and more bad press hitting the news about the escalating number of illegal houses built in Spain, we have set about starting a forum for all those at risk or are directly or indirectly caught up in the problem Some of the figures estimated are above 100,000 homes at present classed as being illegal Malaga estimated 50,000 illegal homes Albox estimated 3000+ illegal homes Catral estimated 1200+ illegal homes Remember these figures are all estimated or quoted in the international, national and local press and could run a lot higher. Plus they only cover a small part or certain areas of Spain in general Its not only are villas and fincas at risk of being illegal, but also apartment blocks that have been built on the edge of town boundaries and get classed as being on agricultural land Quote Link to comment Share on other sites More sharing options...
brianc_li Posted May 26, 2009 Share Posted May 26, 2009 No dispute that Spain is deep in the poo. Prices (Not asking ones but those who are buying) have already fallen 30% and there is a general consensus that there is still quite some way to go. Another 30% would be my best estimate. Santander, whilst I have no inside information, do appear to be riding the storm reasonably well. They are the only ones of the consortium (with RBS and Fortis) who have come out of the purchase of the Dutch Bank ABN Amro well. The chunk they were interested in and now own, South America based Banco Real, has proved to be a good buy thus far. Yes they have some exposure to the Spanish (and UK) property market but that is a relatively small part of their portfolio. Crucially thy also didn´t get involved buying any of the now toxic assets that have brought so many other big banks to their knees. Where you are most likely to see a real crisis in Spain is amongst the small regional banks (cajas) that lent heavily against security that is now worth a fraction of its 2007 value. There are some cracks showing there. Thus far they have been plastered over but I doubt they will for long. Quote Link to comment Share on other sites More sharing options...
weimarener Posted May 26, 2009 Share Posted May 26, 2009 Source??/ Just google Spain and illegal buildings and 100K of links will appear. i wouldnt call a google link a reliable source unless im looking for a cartoon or a joke. Quote Link to comment Share on other sites More sharing options...
Deckard Posted May 26, 2009 Share Posted May 26, 2009 i wouldnt call a google link a reliable source unless im looking for a cartoon or a joke. and you are who, a spanish builder? Quote Link to comment Share on other sites More sharing options...
rxe Posted May 26, 2009 Share Posted May 26, 2009 I am so glad that everything is OK here in the UK and that we have none of these problems Spain is in a far worse place than us. Some anecdotals, my mum has a house out there (built in the 60s), and I've been going to the same area for about 40 years. 1) There was a plot below us which I considered buying - mainly to protect the view. It was a shitty plot - the last one on the headland, very steep, no view at all from most of it. I had no idea what they wanted, so I dropped into the EA. Ah yes he said, and excellent plot (b******ks, thinks I, we've got an excellent plot, that one is pants). They wanted 750K euros for a plot, nothing on it, you'd need to spend another 300K building a place there, and even then, you'd have a view of some one else's laundry patio. Needless to say, I declined. It is still for sale. 2) There was a hill side nearby that was geologically unstable. The locals never built there, they knew that everything fell down. Then the developers poled up. They underpinned the entire hillside - ground works alone took a year. They drilled massive holes in the side of the mountain and put vast steel bolts in. God knows what this cost -10s of millions at a guess. Then they discovered that the planning permission was hookey, they're all in court, and the mountain is covered in weeds again. 3) Another development, a few miles up the coast. 600 "town houses" - at 0.5m euros each. Think of a shoddily built terrace in the UK with extra sunshine and you've got the idea. They're on the wrong side of the headland, so no sunsets. Some have sold, many are empty. All have cracks through them, the developer has gone bust, and the owners are in a bind. We're bad, but we've got nothing like Spain. Quote Link to comment Share on other sites More sharing options...
brianc_li Posted May 26, 2009 Share Posted May 26, 2009 i wouldnt call a google link a reliable source unless im looking for a cartoon or a joke. The problem of illegal builds, primarily but not exclusively on the Costas, in Spain is well documented. A google search will take you to many reliable links. Other major problems in Spain are: - ´land grab´ laws, particularly in Valencia - banks not honouring their ´guarantees´ - poor/slow legal redress to problems - widespread local government corruption Quote Link to comment Share on other sites More sharing options...
Cogs Posted May 26, 2009 Share Posted May 26, 2009 (edited) The problem of illegal builds, primarily but not exclusively on the Costas, in Spain is well documented. A google search will take you to many reliable links.Other major problems in Spain are: - ´land grab´ laws, particularly in Valencia - banks not honouring their ´guarantees´ - poor/slow legal redress to problems - widespread local government corruption And thus there is a partial solution in the hands of government. I wouldn't have the nerve to touch any property in Spain at any price (even free given I don't trust them not to turn it into a vast liability of some sort). Never happen of course. Edited May 26, 2009 by Cogs Quote Link to comment Share on other sites More sharing options...
catara Posted May 26, 2009 Share Posted May 26, 2009 i wouldnt call a google link a reliable source unless im looking for a cartoon or a joke. So what are your reliable sources?? You must be really thick if you did not know that Spain has many-many illegal buildings. Do your research before posting. Quote Link to comment Share on other sites More sharing options...
Bloo Loo Posted May 26, 2009 Share Posted May 26, 2009 And yet sellers still expect pre crash prices less 10% or so...... Quote Link to comment Share on other sites More sharing options...
Bubble&Squeak Posted May 26, 2009 Share Posted May 26, 2009 (edited) i wouldnt call a google link a reliable source unless im looking for a cartoon or a joke. Google isn't a source you fool. Google is analogous with an index of a book, it is a way of finding content The source is the website that Google links to Edited May 26, 2009 by Bubble&Squeak Quote Link to comment Share on other sites More sharing options...
weimarener Posted May 26, 2009 Share Posted May 26, 2009 I am thinking this is pretty common knowledge by now.See for yourself. Here is what 1 minute of google'ing pulled up... http://www.illegalvillasspain.com/index.html directing me to a website clearly made by disgruntled fools isnt really a reliable source. Quote Link to comment Share on other sites More sharing options...
Recommended Posts
Join the conversation
You can post now and register later. If you have an account, sign in now to post with your account.