[Anonymous]

The collapse of the Spanish property market will have dire consequences for property markets in other countries in Europe. During the boom in Spain house prices increased very steeply and these price increases rippled from Spain and caused house prices to rise in countries like Portugal, France, Italy, Greece, Cyprus and more recently caused house prices to rise in far flung places of Europe like Bulgaria and Turkey.

The reason why rising property prices in Spain caused property prices in other countries in Europe to rise was because people who traditionally preferred to buy holiday and retirement homes in Spain found themselves priced out of the property market there because of the steeply rising house prices during the boom and these people were forced to look to countries that had cheaper property in order to be able to buy property. But as more and more people started buying property in these cheaper countries the prices of property in these countries also started going up which eventually made property there expensive as well as in Spain and people were then forced to go even further afield to places on the fringes of Europe like Bulgaria and Turkey in order to be able to afford a property.

However, now that Spain’s property market is in collapse and house prices are falling steeply it will mean that the falls in house prices will ripple out of Spain and cause house prices in other countries to fall. The reason why falling property prices in Spain will cause property prices in other countries in Europe to fall is because people will now be able to buy property in Spain, which was usually their preferred country of choice anyway when buying a holiday or retirement home, and since more people will buy in Spain this will mean that fewer people will buy property in countries like Portugal, France, Italy, Greece and Cyprus which will result in less demand for property in these countries causing house prices to fall there. Eventually the ripple effect of falling house prices in Spain will reach countries on the fringe of Europe like Bulgaria and Turkey causing house prices to fall there as well.

I have no doubt, based on my knowledge of economics and the way property markets work, that by the time the bottom in house prices has been reached in Spain the drop in house prices from peak to trough will have been 90%. This means that a property priced at one million euros at the height of the boom will end up being worth 100,000 euros, a property worth 750,000 euros at the peak will end up being worth 75,000 euros, a property worth 500,000 euros at the peak will be worth 50,000 euros, a property worth 250,000 at the peak will be worth 25,000 euros, a property worth 200,000 at the peak will be worth 20,000 euros, a property worth 150,000 euros at the peak will be worth 15,000 euros, a property worth 100,000 euros at the peak will be worth 10,000 euros and a property worth 50,000 euros at the peak will end up being worth just 5,000 euros.

The effect of such sharp falls in house prices in Spain together with the vast over supply of property on sale there will have an enormous impact on how far house prices will fall in other property markets in Europe. I am predicting peak to trough house price falls in Portugal of 80%, in France of 80%, in Italy of 70%, in Greece of 70%, in Cyprus of 60%, in Bulgaria of 70% and in Turkey of 60%.

In recent years Turkey has become the new hotspot for buying property and whenever you went in the town of Bodrum in Turkey you would find an English property speculator lurking about. Some reports suggest that house prices have still been rising in Turkey and one explanation for this is that Turkey is not in the Euro zone and is therefore not affected by the Euro zone crisis. However, people have only really buying property in Turkey because they couldn’t afford to buy property in their preferred locations of Spain, Portugal, France, Italy, Greece and Cyprus because house prices had risen so rapidly there. But with houses prices crashing in Europe it is inevitable that people will rather buy there than in Turkey and this will significantly reduce demand for Turkish property resulting in sharp falls in Turkish property prices.

[katy]

Absolute bullshit 🙄 Prices in all countries have dropped, including Turkey and Bulgaria. Infact Bulgaria makes Spain look good regarding corruption and building practices. Many of those countries have had properties featured on the Holiday Homes from Hell programme the same as Spain.

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