Re: Re: What Effect On Spanish Property Prices, If,

LoadingFavourite
#102316
Profile photo of Anonymous
Anonymous
Participant

Hello, my thoughts for what its worth
1 & 2 I am not sure that the fall in property prices would be that severe, at least not in a medium term perspective, the reason being that foreigners are such a dominating group. Many of the properties in “prime locations” will be priced in local currency, all things equal the foreign buyer would be able to pay up in devalued euros or pseteas. Some properties in unattractive locations will fall, but that would probably have been the case anyway. If the currency were to be floated (the pseta case) rates could be lowered wich would have a positive effect on the economy, currency would drop further though. As you say I think leaving the Euro is unrealistic, but the possibility is certainly greater than it was a year ago. Another issue would be how to treat mortgages; would your mortgage in a spanish bank be converted to psetas? And what would happen to the Euro mortgage in a UK bank for instance?
3. No clue, but I think that the banks at this stage would welcome negative interest rates which could help prop up property values, that would of course require an adjustment of the currency.