Tuesday, April 24, 2007

Spanish Bubble in danger of bursting

Spanish property groups weigh on Europe

Fears that the Spanish property bubble, which drove companies like Metrovacesa and Sacyr Vallehermoso more than 100 per cent higher last year, was in danger of bursting was highlighted by Monday’s 41 per cent fall for Astroc Mediterraneo

Posted by sirgoogle @ 08:35 PM (677 views)
Please complete the required fields.



7 thoughts on “Spanish Bubble in danger of bursting

  • sold 2 rent 1 says:

    He said: “Spain is going to face the very direst of economic circumstances: a cycle of recession, deflation and widespread private sector default – a depression in fact. This stock market slide is not just a ‘correction’. It has a very, very, long way to go.”

    Is it D for Depression?

    “I can see a mortgage crisis building. We have a serious property bubble in this country and everyone is in denial; it’s worse than the US.” Re/Max International said it had cut prices by 25pc on holiday homes in saturated regions earlier this year”

    25% – or is it D for deflation?

    Both. And Spain is leading the way into the abyss.

    Guys. When will you wake up?
    This isn’t about HPC any more.
    It’s about a deflationary depression

    Reply
    Please complete the required fields.



  • sold 2 rent 1 says:

    All current asset prices are based on humungous levels of debt.

    When these so called analysts come up with figures of how much property is overvalued they are thinking about returning to debt levels of the 1980’s

    But what happens if we have to return to debt levels of the 1930’s?
    The situation is dire.

    Reply
    Please complete the required fields.



  • japanese uncle says:

    Spot on!

    Typical house price in Madrid was reaching the level above 10 times average annual salary, thus 60-70% correction is inevitable, historically. Exactly the same applies to the UK. Such a severe decline in one of the dominant element of our expenditure cannot help exerting negative ie deflationary influence over the general price levels of goods and services. Furthermore there is additional factor in the UK, ie 1.5 million immigrants happy to work at lower salary. Besides unions are virtually non-existent where employers are given freehand to sack workers in the UK. Deflation, rather than inflation is beyond the horizon, I believe.

    Reply
    Please complete the required fields.



  • holding out says:

    Deflation would require the currency to maintain it’s relative values against importer country currencies such as JPY, EUR and of course YUAN since we can hardly source our own goods as we no longer have the means. Why are you so confident the £ will hold it’s strength.

    Reply
    Please complete the required fields.



  • japanese uncle says:

    I am not that confident actually. Unless there is run on pounds, deflationary trend may prevail. If there is run, pound could well be 120 yen or so. And imported goods must be priced twice the level as they are. Sure.

    Reply
    Please complete the required fields.



  • There are plenty of immigrants working for low wages in parts of Spain too, mostly from South America. Until recently these “poor” workers came from other, less developed parts of Spain, where unemployment was rife, and small country towns disappearing with the loss of (low-paying) jobs in the country. In Barcelona, many bar staff are now South American, as are cleaners, refuse workers, farm hands etc. The locals bewail the fact that the “career” waiter they’d known all their lives who was able to afford to run a family has disappeared. But while the price of food and drinks in bars has gone up a lot since the introduction of the Euro, salaries have not kept pace…

    Reply
    Please complete the required fields.



  • dohousescrashinthewoods says:

    FT front page is now listing “Spanish property boom ends”
    (http://www.ft.com/cms/s/f748439e-f29f-11db-a454-000b5df10621.html)

    There is also a suscriber-only analysis (I can’t access) entitled:
    “Analysis: Writing was on the wall for Spanish housing bubble”
    (http://www.ft.com/cms/s/99cfbb46-f28d-11db-a454-000b5df10621.html)
    Oddly it is listed underneath the Sainsbury’s story.

    Reply
    Please complete the required fields.



Add a comment

  • Your email address is required so we can verify that the comment is genuine. It will not be posted anywhere on the site, will be stored confidentially by us and never given out to any third party.
  • Please note that any viewpoints published here as comments are user´s views and not the views of HousePriceCrash.co.uk.
  • Please adhere to the Guidelines

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes:

<a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>