It is borne from many years (totalling 23) in the property business both UK and now Spain for the last 13. The spanish are traditionally a saver nation, the older ones anyway, not so much the youngsters. In the Franco regime, no one was allowed to have much and taxes were high, and so the money under the mattress syndrome was and still is rife. The Spanish will buy something and then as far as they are concerned, they put a price on it to resell. It is irrelevant to the what a bank valuation is, or what others will pay for it, but what they want for it. And this gets increased yearly, despite the item not selling!

As an example, last year I went to a developer who was complaining about not selling the last units they had. After explaining how we worked, I showed them what the reserve price should be in accordance with a bank valuation.

Despite wanting badly to sell, they would not accept it, stating the bank valuation was irrelevant to them as the price was what they wanted, and yet they had to sell!!!

The notaries cannot understand a seller letting their property go for less than the price declared on the escritura – I have had problems with this and in one case he demanded just over 700 euros in tax to ensure there would be no comeback by hacienda! Since them we have spoken to several notaries who also do not understand selling something for less than paid for it and so my statement as above.

Once the Spanish in general realize they will have to sell at below the price they paid for property assuming they really do NEED to sell, then the market prices will drop and the market itself start to recover!

Hope that clarifies things

A second case I had was so ridiculous that the sellers had to transfer nearly 10,000 euros to allow the deal to go through. Anyone else would have defaulted but they owned another proeprty in Spain and couldnt do that. They wished to clear their debt and leave themselves ok for the future. Again the notary could not believe it and extra money had to be paid at notary to cover the tax issue – its was around 700 euros and should mean that there is no comeback.

Lawyers have looked into this and said it is possible to undersell without penalty providing it is notified in Hacienda before the deal is concluded and then there is clarity for any possible comebacks.

The Spanish do not understand the concept of pricing to sell and do not understand people making a loss – I think maybe in the next couple of years they may start to get their head around it.