Reply To: Developers going bust

#80417

Anonymous
Participant

To a certain extent because of its size, but also because it had a reputation for being one of the better run developers in Spain.

This kind of news is a negative feedback loop. It creates negative market sentiment, which drives more to the wall, and so on. The situation is clearly not good, and it’s going to get a whole lot worse. I think we are just at the start.

More on Labaro’s problems (in Spanish)

http://www.elpais.com/articulo/economia/Labaro/convierte/mayor/victima/crisis/inmobiliaria/elpepueco/20080401elpepieco_8/Tes

Yes, I think the expansion into Eastern Europe has been part of their undoing. Just like they all built the same sort of rubbish in Spain, they all rushed as one into places like Poland as part of a diversification strategy. Always the same; no differentiation, no unique and durable advantages. All these developers thought they were hotshot business wizards, but in reality they were just the beneficiaries of a mindless property boom fuelled by cheap credit. Madness.

Mark