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I am highly sceptical about 2008 being the year that the property market bottoms. There is no evidence to support this, and none has been referenced in this thread so far.
I understand the estate agents who are arguing this case but they are doing so because it is their job to find the silver lining in the cloud. After all, if you can’t be optimistic about the property market then you really shouldn’t be in that business, but that doesn’t mean that those of us without vested interests shouldn’t interpret your optimism for what it is.
There is no light at the end of the tunnel yet. We are in a new situation and to reference our past is only as useful as referencing Japan’s experience.
We are faced with over supply on epidemic proportions and this will take five to ten years to sort out. Obviously the worst case is the 2 beds, but there are also a lot of empty and unsold villas.
On the demand side, the Spanish have shot themselves in the foot on a spectacular scale. Corruption is endemic in the spanish system and is currently getting the publicity it deserves. Add to this the treatment of Lewis Hamilton the other day and yet more ETA bombs and I think that the British love affair with Spain -well it may not be over but let’s say that demand is satisfied now. The Germans have certainly fallen out of love with Spain and I don’t see any other nations who weren’t soppy with Spain in the past are hardly like to flock here now given all the bad publicity.
On top of this we have the credit crunch, the effects of which have barely impacted the financial system. It is already it is a lot harder to get a mortgage and I heard of one bank that simply won’t finance any more mortgages on the CDS. For those of you who thought that the current financial crisis is coming to an end, bear in mind an estimate that only one quarter of subprime losses have been declared. I think it’s time some Spanish banks came clean…
The spanish property market is in denial -that what mark refers to as a “stalemate”. The worst is certainly to come given that there are no economic positives appearing on the horizon as yet. To suggest a quick turn around in fortune is to ignore the reasons why we are where we are and to discount the global financial climate.