Bank Repos No Longer Dragging Down Market Claims Industry Insider

Visitors at SIMA Madrid
Visitors at SIMA Madrid

Spain’s gargantuan stock of bank repossessed homes has been dragging down house prices for years, but the depressing influence is starting to wear off as inventories decline, claims a spokesperson for Spain’s developers.

Repossessed inventories are not the problem they were. “The stock of property is no longer a distorting factor as it was in previous years,” claims Carolina Roca, representative on the Executive Committee of the Spanish Association of Building Developers (APCE in Spanish).

This year’s SIMA international property show in Spain’s gargantuan stock of bank repossessed homes has been dragging down house prices for years, but the depressing influence is starting to wear off as inventories decline, claim Spain’s developers. illustrated the way banks have changed their marketing in response to declining inventories of repos. “They’re no longer bombarding us with stock on their books, and this has gradually dropped into second place,” Roca told the Spanish press.

She also said that today’s buyers are more clued up than before, which has changed the face of the industry, as developers have to respond to more demanding clients.

SIMA 2015 had almost 10,000 properties on sale. More than half the homes for sale were located in Madrid, but there was also property in Alicante, Murcia, Malaga and Castellón. Show organisers claim public attendance was high, with many genuine house-hunters passing through the doors.

“This show has clearly illustrated that residential demand is starting to awake from its slumber of the last few years, which brought on by the economic crisis,” said Eloy Bohúa, general manager of Planner Exhibitions, who organised the show.

SPI Member Comments

Thoughts on “Bank Repos No Longer Dragging Down Market Claims Industry Insider

  • I don’t understand why ‘Spain’s gargantuan stock of bank repossessed stock’ is no longer dragging down or having a major impact on the market in general. Where are they if they are not affecting the market, is there a pending tray? Prices fell in April this year according to Tinsa, confused signals.

  • “Pending Tray” is not a bad analogy. Put simply, Banks are less prepared to fire sale repos than previously. Differentiation is also becoming a big factor. In the height of the property surge all three bedroom homes were treated homogeneously. They all rose by the same percentage. Now desirable property is holding its own or rising gently whilst undesirable has been parked in the “Pending Tray”.

    • Mark Stücklin says:

      That´s a good way to look at it Perry. Also consider that some / much of the “pending tray” has no market, and might never be sold. Therefore it’s not really influencing transaction prices (and the house price index), which only reflect the market for property that can be sold.

  • Chris Perree says:

    Another point to note, is that banks are refusing to agree Dacions or repossess as most properties are in negative equity, resulting in hard pressed owners and speculators being unable to offload.
    The banks receive no mortgage payments, Communities receive no fees and these properties are effectively in limbo for some time
    It is also possible banks have offloaded large chunks but probably to speculators trying to pick the bottom of the market.

  • Campbell Ferguson says:

    When the banks sell to investors the property then becomes a ‘resale’ and so goes off the ‘new’ list. All these properties are still out there as investors try to make sense of them now they’ve bought them. They then will see at low prices – with the banks probably having a clause in their sale to make sure they are the mortgagor of choice presented to the individual purchasers. Given that they only have to have about 20% asset backing of what they loan its a nice way for the banks to build up their asset base again.

  • Eddie walsh says:

    Hi people
    What can be done when a property which is unfit for habitation no water no electric due to robbery of all the pipe work in the apartment block. It has been like this for almost 18months ( Bahia Del Golf in Almerimar ) The bank (Banco Popular ) refuses to enter into any kind of meaningful negotiations with my daughter and son ln law. For example they have property in the area but are totally unwilling to consider a transfer of mortgage which my daughter would be quite willing to do thus them having a place were they love to go to and the bank having continuation of a mortgage
    Any thought’s comments advice seriously most welcome
    Mr Eddie Walsh
    Very concerned Grandfather
    Wigan England

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