Most of the stock of repossessed homes taken over by Spain’s “bad bank” will be in just 4 regions, according to press reports.
Spain’s so-called “bad bank” (proper name Sareb), set up to take over the real estate assets of Spain’s nationalised banks, will have its biggest challenges in Catalonia, the Valencian Region, Madrid, and Andalucia, which will account for 66pc of it’s repossessed stock between them (see table above).
Originally valued at around 18 billion Euros in total, some 75pc of the assets will be categorised as “illiquid” or hard to sell, say press reports. Many of them will have been built in coastal areas with foreign holiday-home buyers in mind.
More like a colossal real estate company than a bank, the Sareb could struggle to attract buyers and compete with other banks if it is not in a position to offer mortgage financing, warns a recent report from the European Commission. “Spanish banks will probably prove big rivals for the Sareb, as the majority of them already offer favourable financing terms to buyers of their real estate assets,” explains the report. “Unless the Sareb can offer similar financing conditions to its clients through financing deals with banks, it will find it more difficult to sell its assets.”