5 obstacles standing in the way of a recovery

Posted on May 29, 2011 by Mark
Filed Under Property market | Leave a Comment

With house sales down 28pc last month compared to March, what is standing in the way of a recovery? The financial news site Cotizalia.com listed 5 big reasons in a recent article

Lack of savings
At present prices, Spaniards simply don’t have enough savings to afford to buy. Experts say you need to pay at least 10pc of the cost from your own capital, which many Spaniards can’t afford to do.

Expectations of falling prices
Many expect house prices to keep falling, delaying purchase decisions.

Fear of unemployment
Unemployment is north of 20pc and rising, undermining consumer confidence, and delaying purchase decisions.

Not what the people want
There are 1.5 million new homes on the market (say Cotizalia) but many of them fail to meet the requirements of buyers, for example being too small or in the wrong location.

The credit crunch goes on
Thanks to the credit crunch banks are still reluctant to lend unless it’s for one of the homes in their swollen portfolios.