The latest news that there were no bids for repossessed flats recently put up for sale in Marbella will probably not come as a major surprise but the ramifications of this go far beyond one auction and with the news that Spanish bank repossession property has increased from one to five a month in Marbella then this is just the tip of the iceberg according to Susana Suspenda Marketing and Operations manager for Spanish Hot Properties. “Mortgage based bank repossessions take a long time in Spain and the repossessions that are happening now date back to the start of the economic downturn so you don’t have to be Einstein to work out that things are going to get a lot worse before it gets better, especially for the Spanish banks and lending institutions here in Spain. Its clear that the auction method traditionally used by banks is just not working with homes not going under the hammer even though they are on offer at 25% less than last years price” said Susana.
So why is this the case why are people just not interested in the hugely discounted prices offered at auction, well according to Susana “its quite simple and is made up of several key factors, the first one being that the price set a year ago was probably not realistic to achieve a sale, the second being the banks greed in not being prepared to take a loss to dispose of the property, thirdly and most importantly there are better deals to be had in the Costa del Sol Property market place with a good example being a recent brand new Villa with its only swimming pool in Riviera being made available at €325,0000 which you just couldn’t build for that and the owners are probably making a substantial loss to sell and finally the auction process is very difficult for most people and it tends to be only Cash buyers who buy at auctions”.
So what now for the Banks in Spain who will start to see a lot more repossessions in 2009 and no real chance of getting the money back they lent. Banks are now starting to delay repossession proceedings with some starting their own property management companies in an attempt to sell or rent out their ever increasing stockpile of repossessed property including brand new developments received back from Spanish Property developers. The banks are doing whatever they can rather than deal with the fact that if they want to sell their repossessed properties they will have to sell for a big loss. So the banks in Spain will definitely have some major decisions to make in 2009.
What impact will this have on the Spanish property market in 2009? Well a very positive one for those who are looking to buy and a negative one for those looking to sell in 2009 according to Susana Suspenda. “There are fantastic deals coming in every day and with limited buyers around to snap them up for various reasons from the credit crunch to the Sterling exchange rate it should remain a buyers market and a bad year to sell” said Susana
Anyone wanting to find out more information about Spanish bank repossessions should contact Spanish Hot Properties for more information.
