The human tragedy behind the Spanish property boom and bust is that families are losing their homes in record numbers
Almost 1 in 5 Spanish mortgages signed between the bubble years 2004 and 2008 are or will become delinquent, according to a study by an association of home-owners facing foreclosure (AFES).
AFES calculate that more than 700,000 families will have had their homes repossessed by 2015.
Specifically, there were 4 million home purchases between 2004 and 2008 – the bubble years of the Spanish property boom – of which 170,000 have already been foreclosed, another 170,000 are in process, and another 375,000 are expected to be repossessed by 2015.
All this at a time when there are more than 3 million empty homes in Spain.
The victims of this drama “borrowed more than they could cope with based on false expectations of rising property prices and employment,” explain AFES. “They never imagined they would lose their jobs and that property prices would crash.”
AFES propose partial or total debt forgiveness by banks, more mortgage lending, and lower property prices to making housing affordable. “The big social drama is that after losing their homes people are saddled with debts they can never afford to pay,” said Carlos Baños, President of AFES.