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Banks dumping repossessed holiday-homes with discounts of up to 70pc

Banks are keen to sell their repossessed holiday-homes before the market shuts down in the autumn, and before the creation of a ‘bad bank’ drives down prices even further.

Spanish banks owning huge stocks of repossessed holiday-homes on the coast are slashing prices in a bid to to dump them before the market shuts down after the summer, according to reports in the Spanish press. Some banks are offering discounts of up to 70pc in popular destinations like the Costa Blanca, in Valencia.

The properties that banks fail to sell before the onset of winter will hang around on their balance sheets until at least the Spring next year, when the holiday-home market gets going again. This stock is expensive to maintain, giving banks an incentive to drop prices now in order to make a sale.

The planned creation of a so-called “bad bank” after the summer, which will take over the impaired assets of Spain’s most sickly lenders, is also expect to drive down prices even further, so some banks are trying to get ahead of the market by reducing prices now.

SPI Member Comments

16 thoughts on “Banks dumping repossessed holiday-homes with discounts of up to 70pc

  • A 70% discount off what though? 70% off the foolish mad grossly-inflated price a bank once stupidly gave a mortgage for? Or 70% off curent market value? If it’s the former then it may not be a ‘discount’ at all in any meaningful sense. On the other hand ‘up to’ 70% could mean anything – or nothing.

  • are you british or dutch….70% of what it was back then..which is with in line of market prices now…and that is mostly the bad stock not the the good one. They will save that till the market goes up in price again. There is no presure from Madrid towards the banks to drop all stock price good or bad..they can do as they please.

  • Ian Nicholson says:

    Using percentage as a marketing tool is rife in many places. Of what is the question! as the market forces determine price. Most housing stock has a value and that is determined by who will pay. Those who do have disposable money and want to buy have first choice, then who can borrow. The bank owned properties are a liability on the books and only market force will prevail. From my research the price trend is downward for some time yet.

  • We have just sold our property on the Costa Blanca at a 57% loss on what it was worth at the height of the market. The price we got was the going rate for our apartments as of today and so we decided to sell whilst there were still buyers out there willing to purchase. The trend I feel will be further falls and stubborn people who think their property is worth more than as of now will be further disappointed I feel in the next few years.

  • Christopher Clover says:

    One of the mayor or issues we are seeing with potential buyers coming to high quality area such as !arbella, is that they are parroting articles such as these, whereas you will not find cases such as that quoted here. In cheaper coastal areas…Almeria, Valencia, maybe. But the number of people looking for properties with 50,60,70% discount are enormous and they are simply walking away empty handed.

    But the bulk of the properties meeting this criteria are spread out in every municipality throughout Spain, not just the Coastal areas, the average price less than €100,000, and the market exclusively a local one. In Marbella, there are few bank repossessed properties in the first instance, and the market is not only a (wealthy) local market, but regional, national, and especially, international.

    Articles of this nature which throw all properties in Spain in the same basket, are tinged with sensationalism and do little service to your readers. By the way, agents here are beginning to report their best year this year since the crisis started. Although prices under €750,000 are likely to drop further, many sellers are already anticipating this drop and offering their properties at prices that buyers cannot refuse.

    Many have been waiting years for prices to drop, and are
    now deciding that the timing is right and prices attractive enough for them to move on with that long awaited life-style change.

    We do not mean to imply that the property market here is not in a crisis, but that it is a crisis quite distinct from that of the rest of the country as the market fundamentals are themselves different.

    Further to this subject you might want to view the following blog post: http://www.panorama.es/blog/1122-insights-marbella-real-estate-market-august-2012.html

  • The agents and developers set unrealistic prices in the first place and then have to discount heavily. Still 70 per cent shows how over priced theses places we’re in the first place.

  • Quote > A 70% discount off what though? < "Exactly" is the same as when stores dicount prices here and say Sale Price! We never know what the true price of anything is!!

    I think there is plenty of time yet to see this crash out. It could drop to 80 90% This isn’t just an ordinary boom and bust event this time round. We are the verge of a complete collapse of the the euro zone. Isn't it exciting!!

  • Property abroad is only a loss if you sell at a loss.
    I own a place on Costa Blanca but I am hanging on to it. Would rather do that that lose tons of money. At least I can rent it to pay most of the bills.

  • As others have said…where are these bargains?
    As someone whom has been looking on sites etc i do not see this drop reflected in the asking prices – otherwise I’d probably have bought by now.

  • paul wentworth says:

    Well! there is some sense in what has been said by previous contributors and also unfortunately some rather not so.
    When stating that one has lost over 50% on what the imagined value of a property to be at the top of the housing bubble, this is surely not reality.
    In reality a loss can only be stated if it relates to the ‘actual price’ paid for the property.
    I agree entirely with the inference that the Banks, when making grand statements about the properties they would like to dispose of, they are at best questionable and at worst complete and utter rubbish!

  • Pepe Maria Greedy says:


    In 2007 my 1 bedroom appartment in the mountains was worth 10 million Eur according to my own and my wifes opinion.
    Now we are selling for only 500.000 Eur, that must be really good bargain…..

    Seriously, the asking price of the spanish own properties getting more and more absurd. They are going to have a brutal avakening when, after having their shit property for sale for 7 years, any interested buywe is offering maybe 5% of what they are asking. At 5% the prices starts to be reasonable considering the “real” productivity increase the last 20-30 years.

    The spanish people got rich because first they got a conversion rate to the EUR that was maybe double or more of what it should have been, so they got alot of “money for free”, on top of that, the prices got even more inflated becasue banks where offering very cheap credits. Well if the credits are gone, and spain has to leave the EURO and we see a correction to the real Pesetas/Euro convestion rate based on spains productivity and financial strength – i think that will wipe off 95% of the balance sheet and property prices…..

    Its very easy to be rich if you get money for free.
    30 years ago, Spain was a post dictatorial third world country with dirty dogs and beggers in the streets. They where driving scooters of dirt roads. Today they are driving Mercedes on 4 lane highways, but everything has been paid by the taxpayers of northern Europe. If Spain had not got all this billions and billions of free money, they would still be almost of the same level as 30 years ago, they are still just farmers and oliv pickers in their mind. They have reached a standard of living they could not even dream about 30 years ago, and it has all been paid by someone else, the taxpayers of northern Europe.
    We should cut up this country and get a piece for free and some spaniards that could work as farm-boys and servants until they have repaid all billions and billion euros they owe us.

  • Quality Spanish property has not and will not drop 70%. Just peruse any of the dozen or so bank repossession websites, the properties are mostly crap, there is very little (almost none) available in quality areas or with a sea view.

    ps. Pepe Maria Greedy is a troll, Spanish Industry is well advanced and eventually will recover. Southern Europe is also more self sufficent than the North which needs food imports from the South.

  • Charmaine & Just Paul.
    Try the two main Catatlan banks Caixabank and Banco Sabadell. They are marketing their property under the names Servihabitat and Solvia. Search on Girona Province. Don’t expect anything exciting though; their main advantage is that they will give high LTV mortgages, where they would refuse them on other non-bank properies. In return you are likely to pay a higher than (current) market price. Possibly OK as a long term investment, but not what most people would consider to be nice holiday homes. – In fact many are rubbish. My advice would be to get friendly with good estate agents and mortgage brokers, – some are actually very good. I am a Costa Brava resident.

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