I wonder if we’ll now see a flood of properties coming onto the market?
Can see similarities with the Japan ‘lost decade’ in the early nineties, in as much as the real killer for Japanese banks was defaults on loans made to property developers. Surplus stock from the boom meant house prices gradually dropping to about 60% from peak after five years or so.
Even if nothing further is developed in Spain, it’ll still take at least five years to clear the existing property overhang on current projections that also mirrors Japan’s.
With most buyers sitting tight, awaiting the euro issues to be sorted, and the market bottoming out, who in their right mind is going to buy this flood of stock in the foreseeable anyway?
Interesting contribution I noticed from a Spanish poster on that FT site…offering one solution..hell its a mess..
¿Optimism? Have a look at burbuja.info to get a sampling of what many Spaniards think about the state of the Economy. More and more people are convinced that the only way out of this is leaving the euro so that we can have our own currency and print out a few Trillion neopesetas to pay our debt, public and private (that’s what the UK is doing, after all). We will get back into the euro in a few years with a clean slate and a much lower effective exchange rate, which will make wonders for our exports and get us rid of all those empty apartment blocks. French, German and Dutch banks will be taken care of by the ECB (the process already started two weeks ago with the QE). But this won’t be funny for the UK banks…not to say British homeowners in the costas.