September 5, 2008 at 3:37 pm #54290
I thought it might be interesting to start a thread that notes real examples of how the downturn is playing out. Sometimes you can learn more from small anecdotes than from any amount of learned reports produced by analysts at discredited financial institutions.
A source tells me that his local bank branch in Marbella did 30 mortgages last year, and this year they have only been allowed to do 4. Two were declined last week, one on a property valued at 650k, for which they wanted to borrow 400k – a 60% loan to value, not a lot to ask seeing as valuations are very cautious now anyway.
He also tells me that the same bank has been instructed not to lend anything – no mortgages, car finance, consumer loans, nothing, to people in the real estate business.
Also, I found Busted’s comments to one of my recent news articles interesting reading. Busted is quite right about asking prices. They are not much help as a guide to real prices.
September 5, 2008 at 4:22 pm #86003
Mark: If you cant lend to real estate related people/company in CDS, than who are you going to lend to ??????
September 12, 2008 at 9:59 pm #86164
Nobody has had anything to add so here is my personal experience of 2008 to date:
As a surveyor carrying out surveys on resales and snagging on new build, my workload was pretty much normal until June. Since then there has been a severe downturn in work across the board. 3 reputable estate agents (Cordoba, Cadiz & Granada), whose clients I deal with regularly, are all still trading but report hardly any sales this year.
With my own building project I am now noticing that when I place orders for materials, they are delivered within 24hrs, sometimes the same day. This was unheard of before now! Even the lorry driver who came to site yesterday was very concerned about the economic crisis in the construction industry.
I was talking to my carpinteria metalica (reja etc. maker) this evening and he reports a severe downturn in his work and also said that nearly all the albañiles (builders) in his town (Sevilla province) are now unemployed. He personally thinks that 2009 will be worse than 2008.
September 12, 2008 at 10:02 pm #86165
Oh and I also now know somebody personally who has “done a runner” from their mortgaged house.
September 13, 2008 at 8:23 am #86167
We’ve just returned from Majorca. We were talking to a local who told us that they had encountered the highest unemployment figures in August, for 20 years, mostly in the construction sector. He said business in general was down on previous years. There was certainly no problem getting a table for dinner,( which was a bonus for us. )
Re house sales in Spain (or lack of) I think the same applies to the UK market.
September 13, 2008 at 8:53 am #86169
Great insight Hillybilly, straight from the horses mouth. Have noticed around here that many are reforming/extending. Mainly Spanish owners. Don’t know what to make of that 😕
Someone I know has just bought with a 100% mortgage 😯 So there is still some lending going on. Wonder what the small print is like! They do say that they are paying 200 euros less a month than the rent they were paying.
September 14, 2008 at 9:44 am #86200
Was out last night with a friend whose husband is a Technical Architect in the town’s main architectural practice. The only work that the practice has at the moment is ayuntamiento/government/EU/church funded restoration work on the town’s monuments, churches etc of which, fortunately (!) there are a lot.
September 14, 2008 at 5:03 pm #86204
I was talking to an estate agent in Castellon (capital of the Costa Azahar). He’s out of a job as of October 1. No sales.
Another agent in the same region made a sale 2 weeks ago. The last sale before that was in February. For her, it’s only a matter of time.
A local bank manager jokes that if someone comes into his office and says ‘deposito’ (deposit), he says ‘please sit down’ and offers them a cup of coffee. If someone comes in saying ‘pedir’ (asking for something, usually a loan or mortgage), he kicks them out.
A number of Spanish savings banks (cajas) are in trouble. In the next few weeks or months, several of them are going to have to fuse, so I am told, though I don’t see how that will help. Big ones like ‘La Caixa’ and Caja Madrid should be fine. It’s the smaller players that you need to worry about.
September 14, 2008 at 6:05 pm #86205
People is scared about some savings banks. My mother has moved her savings from one of them to La Caixa.
I suggest all expats to forget small ones and move to biggest like BBVA, Santander or La Caixa.
If spaniards get scared we can start seeing queoues very soon. In Spain the maximun amount guaranteed is about 18.000 euros, so we aware of not having all eggs in the same place. 💡
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