Reply To: Spanish Real Estate Bubble bursts


I think it’s necessary to look at the bigger picture. The Spanish property market has been driving the economy for years, among other things because home equity has propped up consumer spending. A crisis for real esate firms, constructors and lenders coupled with a fall in house prices will be a serious setback for the Spanish economy. It’s had 14 years of solid growth so a correction seems long overdue. Also bear in mind it has the second-largest current account deficit in the world after the United States – not a good situation to be in.

If the Spanish economy goes into recession, Spaniards won’t be buying homes and so any foreigner can kiss good bye to any investment potential for a long, long time. There’s an interesting take on the situation at: