Re: Re: Are the British to blame for high house prices in Spain?

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Chopera
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@desolation wrote:

Are the British to blame for high house prices in Spain? Many of the people who buy property in the Spanish costas tend to be British followed by the Germans then the Dutch and scandinavians. Do high property prices in England ripple out and push up property prices in Spain? To what extent does the influx of British home buyers in Spain affect house prices in the costas in Spain? Will a property crash in Britain cause house prices in Spain to fall further?
Does the poor exchange rate of the pound against the euro and falling demand for spanish property by the British result in significantly lower house prices in Spain? Is it worthwhile waiting for a full scale “blood-on-the-streets” property crash to occur in Britain before buying a property in Spain?

I think you can argue that the British have placed upwards pressure on house prices in the areas where they have been buying. But those areas account for a tiny proportion of the Spanish housing market as a whole. The main reasons Spanish house prices went so high include: interest rates being held too low (caused by the euro), slack lending by the banks, property developers operating a cartel over prices, the Spanish government providing fiscal incentives to buy property, and a general held belief that property prices in Spain only ever went up (which in turn caused excessive speculation). I suspect there are others – such as councils forcing up land values – but I don’t have much data to hand.