Wednesday, January 2, 2008
The pain in Spain
Inmobiliaria Colonial Shares Are Suspended in Madrid
Inmobiliaria Colonial SA, the Spanish property company that lost 1.87 billion euros ($2.7 billion) in market value in the last two sessions, was suspended from trading in Madrid. Rising borrowing costs and stricter lending conditions caused prices in Spain's residential property market to freeze last year, fueling concern about the level of Colonial's debt.
Posted by alan @ 10:43 PM (586 views)
2 thoughts on “The pain in Spain”
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daft boy says:
Does this mean that spanish property is not a good investment at the momento ?
guiriduro says:
spanish property hasn’t been a good investment for 4 years, or even a satisfactory one for 2. Salaries are comparatively low, so house price inflation was driven by foreigners paying silly prices on the coasts, and spaniards waiting even longer to leave the family home, with some of the parent’s equity, and a hefty mortgage – all down to low eurozone interest rates. Interestingly, the spanish collapse started in April 07 before US subprime caused the credit seize-up in august, and was triggered by a fall out of confidence with the construction companies who had massively oversupplied the market. Of course, the added pressure of the credit squeeze will push prices down further. Prices have slightly eased where I live, Barcelona, but that’s because the catalans are notoriously tacaños (tight), volumes have shrunk enormously and the only properties moving have been discounted. The fall awaits, but its definitely coming – commercial property has already flopped.