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I lifted this from another forum. It’s taken from a renowned property magazine in Spain. This may not come as any surprise to market watchers on here however the unfairness lies with guaranteed finance being available and an added price premium.

I know it’s dog eat dog in markets, especially property but any prospective buyers would do well to consider not entering a market which behaves in such a disjointed manner.

A study by a Spanish banking association concludes that bank repossession properties are on average twenty percent more expensive than properties sold on the open market.

The association of Users of Banks, Savings Banks, and Insurance (Adicae) looked at 96 properties offered by six banks. It found that in many locations banks were charging a huge premium for the “priviledge” of mortgage finance, effectively undercutting local agents while at the same time making a large profit from consumers unable to find comparable lending terms on the open market. In one case a property was priced at 132 percent above comparable properties in the area.

Interestingly the problem is more acute for local agents than for our readers in the overseas property industry. Buyers in coastal areas are more likely to be international and to have higher deposits or buy cash meaning banks have less pricing power.

Property stock in coastal areas also has a higher proportion of developments which have never been occupied which banks are keener to sell off in bulk which is another check on bank repossession prices.

The fact remains that any self respecting international agent would not touch the vast majority of stock on banks’ books. However, due to the lack of property information and photos on bank websites, it can be difficult for consumers to compare “like with like” which is confusing and increases the sales cycle for the industry.

It’s not just banks competing unfairly on financing which is inhibiting international sales, it’s incompetent marketing too.

[Anonymous]

If one is lucky to buy a property from a Bank & I have not come any one or his dog who has bought from the Bank. SO the Banks charge 20% more not only the price but over the life of the mortgage. The mortgage products on their properties are loaded with extras. Once the buyer has been screwed by the Banks than the Hacienda will kick in for charging taxes & penalty for under declaring. Talk about disjointed market.

If the above situation i.e. disjointed market. I am certain that Spain would have reduced half of unsold housing stock, non performing loans would become performing. The remaining half would have been areas,towns that would never have been sold. ,

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Shakeel. I think the entire Spanish property market is simply waiting for better times. Marking time, staying afloat until the worm turns and they can all get rich again.

The market in Spain has always been disjointed. That’s because in essence it’s a speculators market selling dreams to foreigners. Not places to live, work and raise families. It will always attract the spivs, crooks and dreamers of this world.

I hope the country and the politicians have learned lessons from the recent past. Try and do things differently in the future force through regulatory policies that will bring market stability and some long term benefit to the Spanish people.

Maybe that’s also a pipe dream. 🙁

[Anonymous]

The operative word is ” Pipe dream”

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