Everyone loves to hate banks in a financial crisis, but Spain’s developers have a particularly good reason to resent them. These days banks are their biggest competitors, forcing them to drop their prices to compete with the discounts banks are offering on repossessed properties, reports the Spanish daily El Pais.
For months now Spain’s developers have been complaining to anyone who will listen about what they see as unfair competition from banks and savings banks, known locally as cajas. Banks are selling repossessed properties at mortgage values or even slightly less, complain developers, who cannot compete if they want to make a profit. Developers also accuse the banks of offering preferential mortgage terms on their own properties, making the property offered by developers relatively more expensive.
As a result, developers are having to respond with deep discounts just to sell, says the article in El Pais. For example Metrovacesa, one of Spain’s biggest developers, is offering discounts of up to 55% on new homes in the Valencian Region (Costa Blanca), and Andalucia (Costa del Sol), and up to 35% in Barcelona and Madrid. Of the 247 new homes in the promotion, a third have been sold in just 2 weeks, it is claimed. Habitat, a developer that has been forced to seek court protection from its creditors, is offering discounts of around 30%, whilst smaller, lesser-known builders are offering price reductions of 40% to 60%, says the article.