Spanish Economy
April 9th, 2008 - Sandra MarshallWe are hearing all the time in the news about doom and gloom in the world economies, but after reading an article in the UK press the other day, I am wondering if Spain is more affected than other European countries, particularly with regard to mortgage debt, and how this may affect people here in Almerimar.
“International banks are scrambling to sell their holdings of Spanish mortgage debt at a steep discount, fearing that the country may be sliding into the worst economic downturn in its modern history.“
Traders are saying that the market in Spanish mortgage securities is sliding, with some foreign banks ‘dumping’ debt at a 40% discount, effectively replicating what happened in the US last year. In addition some of the country’s biggest property developers are struggling to avoid insolvency.
Experts are also saying that Spain’s housing market is far weaker than official statistics suggest, warning that prices could fall 20pc to 25pc.
“All kinds of ploys have been used to disguise the true extent of the price falls, which we think are 5pc to 7pc already. Buyers have totally abandoned the market. We’ve had a wave of negative sales as people pull out of commitments already made. We have a very worrying situation. The developers simply cannot refinance their debts. We need to cut interest rates by 2pc, which is obviously not going to happen.”
Whilst the Bank of Spain is still saying that the banking system is strong and Spain has a budget surplus of 2% GDP as a cushion, economists are predicting a recession here, not helped by Europe’s monetary union, and the debate is more on how deep it will be.
To read the article in full click below:
To me this all sounds pretty serious, but then the worldwide picture seems to be, and so much of it started by mortgage debt, and effectively greed and misguidance in the property markets.
I would be interested in comments from local Spaniards and their views on how life will be affected, particularly if mortgage rates go up as is also predicted in the UK. Will more bars and restaurants for example struggle as people have less disposable income? It also really does seem as if anyone with property here would do best by holding on for several years.
About Almerimar
Almerimar is located in the region of Andalucia, Spain. The nearest airport is 30km away in Almeria. Other airports that are within 3 hours include Malaga, Murcia, Granada, and Alicanti. Other holiday resorts in the region include Mojacar , Aguadulce and Roquetas de Mar
Almerimar is a great place to live as an expat amongst the expats, or to work amongst the Spanish. There are all kinds of properties including villas, apartments and town houses for rent or sale. It is a very traditional part of Spain, with traditional Spanish foods so if you plan to travel to Spain either to look for jobs, for your company to trade with companies in Spain, or to learn Spanish and enjoy the Spanish weather then come and take a look.
If you are interested in purchasing a property in Almerimar please visit our sponsors Mirror of the Sun or Mediterraspain. If you have purchased a property and need it furnished please check out our Sponsors DBJ who will give you a Exclusive 5% discount with the code AL2008.
If you want to learn Spanish, get help with anything to do with the legal issues in Spain, or want WiFi access in the marina please check out our sponsor CentrePoint who will give you a 10% discount off all services with the code AL2008.
If you want an amazing activity based day out in the mountains and to learn how to ride a motorcycle off road then check out our sponsor The Long Way Round and get 5% off with the code AL2008.
Almerimar is also one of the largest marinas in Spain with over 2,000 births and excellent boatyard facilities.
