Reply To: Spanish property market 2007/2008 report discussion

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@charlie wrote:

Wasn’t it these multi-purchase investors who caused a lot of Spain’s problems in the first place, giving a false sense of demand, especially re. off-plans?

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Without a doubt charlie. I suspect it would be a clever move to convince builders to oversupply and then scoop up the overhang a year or so later when they are about to default on mortgages.

It´s a bit like the hosiery business. Large department stores approach a factory owner and convince them to supply them with huge amounts of socks. The factory owner invests up to the hilt on new machinery. Then, the buyer returns and tells the factory owner that instead of them paying 30 pence a pair, he will have to make them for 15 pence a pair. The factory owner is backed into a corner.

I know people who have experienced this in Leicester, and other, wiser ones who told the big buyers where to get off!!

I wonder if the developers would refuse the investor business should they return to Spain? I suppose that is a silly question.