During the boom developers and banks were the best of friends, as banks fell over themselves to finance any old real estate project. Then came the credit crunch, which soured the relationship. Now banks are starting to look like the enemy, as developers in Alicante accuse banks of stealing their clients through unfair competition.
According to Jesualdo Ros, general secretary of Provia, a developers’ association in Alicante, banks are undercutting developers’ prices with repossessions, which they are also sweetening with preferential mortgage terms. As far as the developers are concerned, banks brought developers to their knees by turning off the credit taps, and now they are killing them with cheap repossessions. Developers’ sales in Alicante are down 40% in the last 12 months.
“There are no words in the dictionary to describe what the banks and cajas (savings banks) are doing,” Ros is quoted as saying. “Not only are they refusing loans to buyers and sellers, there are also cases of bankers advising clients to pull out of purchases that they had already committed to.”
Banks and savings banks are thought to own a stock of around 4,000 new homes in Alicante province, principally on the coast.
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