Monday, August 11, 2008
And it’s worse in Spain
If you think the British property market is in a mess, then a quick trip to Spain will put things in perspective. Property prices have fallen by a crushing 35% in the last year, four times faster than in the UK, and haven't stopped plunging yet. This spells disaster for an economy where investment in housing is worth 10% of GDP. And it's going to get worse. We were awestruck by the scale of construction along the coast, massed ranks of half-built villas and apartments squeezed into every dusty hollow and ditch. Who is going to shell out for all this whitewashed concrete, even at today's knock-down prices? The Spanish property market bubble has been well and truly pricked, but sadly too late to save the beauty of the country's coastline.