An online debate amongst readers at the website of ‘El Pais’ – Spain’s leading daily – provides some insight into what the Spanish think about the country’s property and mortgage crisis.
Many of the readers point the finger of blame at the banks and the government for inflating a property bubble that has now burst, leaving ordinary Spaniards to cope with negative equity and rising unemployment.
One participant, on the other hand, points out the collective responsibility for the bubble, which many buyers helped to inflate by paying exorbitant prices for homes.
“Although we could see this explosion coming, I don’t think even the biggest pessimists thought that the crisis would get this bad,” he writes. “But the blame can’t be pinned on the banks and property companies alone. Nor on the different governments that have been in power. At the end of the day we have all helped to created the bubble by paying exorbitant prices for flats and houses, using impossible mortgages, and ignoring our own resources. I remember friends and colleagues saying “property prices have never fallen”, taking it for granted that if they have never fallen in the past, they will never fall in future, and that “there is no safer investment than the real estate sector”. In fact, any time you hear comments like that about any type of investment, you can be sure that a bubble is in preparation.”
Another participant, who runs a kitchen fittings company, described his experience of the crisis. “I have a company making kitchen fittings that I started just over a year ago,” he explains. “I started with 16 employees, and now we are down to 11. Domestic demand for kitchen equipment is down 30%, and more than 40% on new developments, where the crisis will really be felt next year, as at the moment we are still fitting out projects started a year and a half ago. Today there are no new projects in the pipeline for next year, as nothing is being sold or financed.”
Another participant, a professor of finance and economics, blames the government for encouraging “the most rancid, speculative, financial capitalism” at the expense of “diversified and economically sustainable growth”. He proposes temporarily confiscating all the profits of non-industrial companies, especially banks, and using them to pay for public investment and government spending.
Many other contributors complain of having to spend everything they earn on paying a mortgage, with more pain to come as interest rates just keep on rising.