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Frank Hovis

Spain Sliding Down The Pan

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RR de Acuña said the overhang of unsold properties on the market, or still being built, has reached 1,623,000 . This dwarfs annual demand of 218,000, and will take six or seven years to clear. The group said Spain's unemployment will peak at around 25pc, comparable to the worst chapter of the Great Depression.

Quick - buying opportunity!

The Spanish government can do little to cushion the downturn. "The room for manouvre in fiscal policy has been exhausted," said Mr Ruiz.

Big room. Leave the euro.

http://www.telegraph.co.uk/finance/economi...depression.html

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RR de Acuña said the overhang of unsold properties on the market, or still being built, has reached 1,623,000 . This dwarfs annual demand of 218,000, and will take six or seven years to clear.

I make that 7.44 years, and only if zero new properties come to market, hardly likely.

So it's going to take at least a generation to sort this one out.

VMR.

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Big room. Leave the euro.

Too late I'm afraid... even AEP has stopped banging on that drum.

Spain is utterly farked fotr the next 10 years, just like Italy and the other PIIGS.

None of these countries can afford to leave the Euro independently now - they would have to walk out at the same time in co-ordinated fashion to pull it off, but that's never gonna happen due to disagreement among their political "leaders".

Germany has won, they fooled the weaker European economies into believing that they were jumping on board the gravy train, while in reality Germany is the only country in the Eurozone to have benefited from the single currency in terms of competitiveness.

Everyone else lost out.

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so why cant people buy villas and "apartments" for little cash?

will be able to soon, they will be giving them away, and with all the problems people have with property over there,

add all this to it, spain property = worthless

i for one am laughing , :lol:

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RR de Acuña said the overhang of unsold properties on the market, or still being built, has reached 1,623,000 . This dwarfs annual demand of 218,000, and will take six or seven years to clear. The group said Spain's unemployment will peak at around 25pc, comparable to the worst chapter of the Great Depression.

Quick - buying opportunity!

The Spanish government can do little to cushion the downturn. "The room for manouvre in fiscal policy has been exhausted," said Mr Ruiz.

Big room. Leave the euro.

http://www.telegraph.co.uk/finance/economi...depression.html

Crap low quality builds that will be damp and decaying in 10 years. Incomplete communities so no maintenance being done, reducing the possibility of sales on those communities further. Many with illegal licences and at risk of being demolished. High taxes and little chance of covering costs with rental income. Soviet style concrete over-developments.

If you see a buying bargain there, you may be better off putting your cash into a big pile and setting fire to it.

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so why cant people buy villas and "apartments" for little cash?

Because people in Spain, both the Spanish and expat property owners, are still in denial about the extent of the problems. Most vendors are still asking for prices at or close to Dec 2007 peaks.

They will fall but it will take some time for reality to hit.

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Because people in Spain, both the Spanish and expat property owners, are still in denial about the extent of the problems. Most vendors are still asking for prices at or close to Dec 2007 peaks.

They will fall but it will take some time for reality to hit.

to be honest , i dont think it will take that much time, i think it is going to happen , soon, and when it does it will be quick and nasty,

:lol:

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Germany has won, they fooled the weaker European economies into believing that they were jumping on board the gravy train, while in reality Germany is the only country in the Eurozone to have benefited from the single currency in terms of competitiveness.

Everyone else lost out.

Those crafty Germans with any savings left will soon be buying up swathes of the Costas. A 2 bed appt for 1 year's wages, for example. There are winners and losers in any cycle. This time it's the Germans. For the last 15 years it was the Brits and their mew'ed lifestyles that built the Costas. The Spanish profited.

If they want to continue to tread water and not sink they'll realise the best way is to quickly slash those inventories and take the hit. This will result in the local economies being stimulated by tourists / 2nd home owners coming to spend their cash. The opposite, ghetto towns/resorts, will make them run a mile.

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Doesnt that assume that NOTHING will be built for the next 6-7 years?

Quite, Sir.

I actually laughed out load when I read the number of unsold Spanish properties. Politicians all around the world have been sounding like Comical Ali for a while now.

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Too late I'm afraid... even AEP has stopped banging on that drum.

Spain is utterly farked fotr the next 10 years, just like Italy and the other PIIGS.

None of these countries can afford to leave the Euro independently now - they would have to walk out at the same time in co-ordinated fashion to pull it off, but that's never gonna happen due to disagreement among their political "leaders".

Germany has won, they fooled the weaker European economies into believing that they were jumping on board the gravy train, while in reality Germany is the only country in the Eurozone to have benefited from the single currency in terms of competitiveness.

Everyone else lost out.

Hmm, I'm so gutted for the rest of Europe, NOT.

The Germans put their heads down and worked, and saved.

The PIIGS enjoyed themselves spunking money up the wall, as did the UK.

Now it's payday and they don't want to pay, and neither do we.

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Those crafty Germans with any savings left will soon be buying up swathes of the Costas. A 2 bed appt for 1 year's wages, for example. There are winners and losers in any cycle. This time it's the Germans. For the last 15 years it was the Brits and their mew'ed lifestyles that built the Costas. The Spanish profited.

If they want to continue to tread water and not sink they'll realise the best way is to quickly slash those inventories and take the hit. This will result in the local economies being stimulated by tourists / 2nd home owners coming to spend their cash. The opposite, ghetto towns/resorts, will make them run a mile.

See my other post.

I've no sympathy with whining debt-junkies, the Germans have worked for this day, they deserve it.

Mind you, I'm no more enthused with the idea of the Spanish coast being taken over by oompa bars than by fake Britpubs and chippies.

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Those crafty Germans with any savings left will soon be buying up swathes of the Costas. A 2 bed appt for 1 year's wages, for example. There are winners and losers in any cycle. This time it's the Germans. For the last 15 years it was the Brits and their mew'ed lifestyles that built the Costas. The Spanish profited.

If they want to continue to tread water and not sink they'll realise the best way is to quickly slash those inventories and take the hit. This will result in the local economies being stimulated by tourists / 2nd home owners coming to spend their cash. The opposite, ghetto towns/resorts, will make them run a mile.

cant be done though...think of Banco Santander and their balance sheet....needs protection from the real world...as do alltheother western banks whose best investment stragtegy is in property.

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Crap low quality builds that will be damp and decaying in 10 years. Incomplete communities so no maintenance being done, reducing the possibility of sales on those communities further. Many with illegal licences and at risk of being demolished. High taxes and little chance of covering costs with rental income. Soviet style concrete over-developments.

If you see a buying bargain there, you may be better off putting your cash into a big pile and setting fire to it.

Add to that the likelihood that the Spanish will also change their planning laws to confiscate all this stuff the minute they think they can get away with it.

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Also this doesn't dire prognosis for Spain doesn't factor in the added downward spiral that a wave of bank failures will create. I mean we all know they are living on bluster and denial because they are too scared to lift the lid and look inside.

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See my other post.

I've no sympathy with whining debt-junkies, the Germans have worked for this day, they deserve it.

Mind you, I'm no more enthused with the idea of the Spanish coast being taken over by oompa bars than by fake Britpubs and chippies.

IMO the main problem with the PIIGS is not debt, it's labour market rigidity.

The level of personal debt is nowhere near the UK, and many people actually try to save.

However, the trade unions think that we are still in 1968 and people are entitled to a job for life, both in the public and private sector - and the sheeple sadly agree.

In a downturn, labour market rigidity coupled with the inability to use the IRs/exchange rate levers is a real killer, particularly considering that all the PIIGS rely heavily on exports and tourism.

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Merge if already on....

RR de Acuña said the overhang of unsold properties on the market, or still being built, has reached 1,623,000 . This dwarfs annual demand of 218,000, and will take six or seven years to clear. The group said Spain's unemployment will peak at around 25pc, comparable to the worst chapter of the Great Depression.

Quick - buying opportunity!

The Spanish government can do little to cushion the downturn. "The room for manouvre in fiscal policy has been exhausted," said Mr Ruiz.

Big room. Leave the euro.

http://www.telegraph.co.uk/finance/economi...depression.html

Ireland cannot be far behind. :( *

* :(

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RR de Acuña said the overhang of unsold properties on the market, or still being built, has reached 1,623,000 . This dwarfs annual demand of 218,000, and will take six or seven years to clear. The group said Spain's unemployment will peak at around 25pc, comparable to the worst chapter of the Great Depression.
Doesnt that assume that NOTHING will be built for the next 6-7 years?

Question for you: what is the typical number of unsold or under construction properties on the Spanish market, over say the period 1980 - 2005?

How abnormal is 1.623m?

Without knowing that, I can't comment. Surely there must always be SOME properties under construction?? Question is, is it usually a million or just a few thousand?

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Ireland cannot be far behind.

Not sure. Ireland has actually taken much of the hit in terms of property prices which ate 40%-50% down from (also ridiculous) peaks. Also its unions are much less strong and productivity generally higher. I´m not saying it isn´t/won´t be tough for them but they are not in nearly as bad a shape as Spain.

How abnormal is 1.623m?

In the peak year 2005 there were about 450k new properties thrown up. In most of the 90´s the figure was around 150k.

Suffice to say, it is a lot!

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Because people in Spain, both the Spanish and expat property owners, are still in denial about the extent of the problems. Most vendors are still asking for prices at or close to Dec 2007 peaks.

They will fall but it will take some time for reality to hit.

Spain crash started a year earlier, in 2006 due to the fundamental issues with the country that are more important than the credit crunch.

The 200K annual demand is an over estimate from figures I've seen before.

IMO the main problem with the PIIGS is not debt, it's labour market rigidity.

The level of personal debt is nowhere near the UK, and many people actually try to save.

The Spanish have a very high level of personal debt

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Question for you: what is the typical number of unsold or under construction properties on the Spanish market, over say the period 1980 - 2005?

How abnormal is 1.623m?

Without knowing that, I can't comment. Surely there must always be SOME properties under construction?? Question is, is it usually a million or just a few thousand?

I saw some figures indicating that none of the big builders had started building anything in the first six months. Not a single new apartment.

Previous demand was around 400K per year, so 1.6Million is, even in a normal year, a massive over-supply.

From Wikipedia

"In 2004, 494,000 (La Caixa, 2005) new properties commenced construction, a higher number than Germany, France and Italy combined. Despite activity on the tourist hotspots the majority of apartments bought were by local Spanish speculators"

From http://news.kyero.com/2009/7/6/spanish-hou...down-68-q1-2009

"66.6% of Spain’s housing stock, or 16,747,294 properties, are classified as primary residencies. The remaining 8,382,000 homes are second homes or empty."

Edited by Peter Hun

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Those crafty Germans with any savings left will soon be buying up swathes of the Costas. A 2 bed appt for 1 year's wages, for example. There are winners and losers in any cycle. This time it's the Germans. For the last 15 years it was the Brits and their mew'ed lifestyles that built the Costas. The Spanish profited.

You can get that in UK too. A 2-bed chalet with all amenities in the £20k ballpark. Almost tempted myself.

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Not sure. Ireland has actually taken much of the hit in terms of property prices which ate 40%-50% down from (also ridiculous) peaks. Also its unions are much less strong and productivity generally higher. I´m not saying it isn´t/won´t be tough for them but they are not in nearly as bad a shape as Spain.

In the peak year 2005 there were about 450k new properties thrown up. In most of the 90´s the figure was around 150k.

Suffice to say, it is a lot!

then Spain has yet to take its "HIT" of property prices.....

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