Re: Re: Spanish Estate Agents Think Prices Will Continue To Drop



I agree with you.
When you assess rental yields you need to take into account the glut of rental property on the market in Spain. I would make an educated guess that at least 85% of the coastal housing stock is available to rent, either holiday or long term.
That’s a lot of property and keeps rental returns low, now and for the future.
There is just far too much property built in recent years and unoccupied.
That fact is yet another indication of how current selling values are far too high. They are high for a variety of reasons.
Not least of those is negative equity and Spanish law which makes any mortgage holder liable for the entire balance outstanding if he defaults.
If they sell for less than the entire debt, they then have to continue to make repayments until the balance capital is discharged. At the top of the market the banks were lending up to 100% LTV. Those LTV’s were inflated so outstanding loan capital is high.
You can safely estimate any property for sale that is too high today represents that entire mortgage as it’s sale price.