Thursday, March 15, 2012

Unwinding

Spanish House Prices Tumble .

MADRID—Spanish house prices tumbled at their fastest pace on record in the fourth quarter, a sign that a long-running property bust will continue to weigh on Spanish households and banks. House prices fell on average by 11.2% in the fourth quarter from the same period a year earlier, well below the 7.4% decline in the third quarter, while prices of used homes was down 13.7% in the period, the country's statistics agency INE said Thursday.

Posted by dill @ 01:40 PM (3045 views)
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10 thoughts on “Unwinding

  • The Spanish banks attempts to support house prices so they could book them as assets and avoid appearing insolvent now appear to be unravelling at last..

    ..I think it unwise to have any dealings with Santander at the moment..

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  • Always wondered how santander balance sheet was ‘bullet proof’

    its completely fabricated!

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  • UT – to what extent would tha be true of numerous UK banks too I wonder?

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  • @3

    well lloyds would have to be nationalised immediately

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  • Indeed.

    I would be interested to know ‘why now’ in the case of Spain though. It’s four years since prices peaked there and they had a deadcat bounce similar to the UK’s. What was the tipping point and could house price falls gather momentum here for similar reasons?

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  • @rant, The bankers have gotten their cash out and parked it somewhere else and now it is time to pull the plug on Spain.

    Our time will come.

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  • r&r

    I am given to understand that the Spanish property bubble was almost entirely financed by Spanish banks in the first instance. However, it is far less clear how much those banks borrowed from other banks in the process.

    The received wisdom is that there was relatively little borrowed from banks outside of the eurozone, and that French banks are amongst the most exposed.

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  • Thank God, at last. Now, when the debt is liquidated and the assets re-valued, once they have bottomed out, then humans can get back to re-building the economy, developing once again land ownership and jobs for the younger generation, and not a moment too soon.

    Lets just hope that bailouts can be ended, interest rates can soar to where they should be and the correction can be as short and sharp as it can be.

    Unfortunately we are following what USA did during the Great Depression, which involves using the printing press to perpetuate malinvestment, thus making matters worse and prolonging the pain.

    Its time to sober up folks.

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  • Libertas,

    The most recent rumblings from across the pond suggest that the Yanks are approaching end-game on the emergency measures, and that normality is coming slowly back into sight – I do hope that’s more than wishful thinking..

    ..and where America goes, so we tend to follow, but in recent history that’s generally been nine months to a year behind the US.

    The core issue today, on both sides of the pond, is excessive expectations of the retiring generation of those who actually do the work to fund their retirement.

    The solution can only come in one of two forms, and in practice will probably be a combination of both..

    a) That those anticipating retirement will have to delay their expectations.

    b) That those retiring will have to settle for smaller pensons than they expected

    Both these factors are already surfacing, but only at token levels..

    ..I personally think it is manifestly unfair to stagger retirement dates. If an older retirement date is necessary (which it is) then it should apply to everyone, and now.

    Instead of a staggered increase to the retirement age, there should be an immediate moratorium on people qualifying for a state pension, until it can be demonstrated that the younger generations can afford to pay it.

    Only when the budget deficit has been reduced to zero will that point have been reached.

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  • Soldforgold says:

    A friend of mine bought a villa in Spain for Euro 490k a few years ago, he owes E400k to Santander other villas in the same block are being offered for E200k but most of those are now repossed and owned by the banks and are not selling. The management fees are not being paid on the complex as there are very few owners now so it is starting to look shabby as ground/pool maintenance is not being carried out, 24hr security guards have walked out because they are not being paid etc. I wonder how many more stories there are like this in Spain

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