Bank will start lending when property prices stop falling

The president of the Spanish banking association, Miguel Martin, said recently that banks will start lending again when “the fear of a property price collapse” has passed. When that happens, the solvency of buyers will improve as a result, he argued.

Speaking at the recent property sector trade fair in Madrid, Martin explained that “with greater demand and stable prices, or without the fear that prices will collapse, borrowers will see their solvency and collateral improve, and credit will start flowing again.”

At the same event, José Manuel Galindo, president of the APCE developers’ association, drew attention to the role played by banks in causing Spain’s property market slump. He called on banks not to discriminate against clients buying property from developers, accusing them of unfair competition for offering better mortgage financing terms to clients who buy property from the banks.

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