That’s the claim by the Presdient of the Spanish Mortgage Association, Gonzalez Sanchez.
Spanish property developers had a combined debt total of 324 Billion Euros in the third quarter of 2009. The banks have no interest in funding property development any more because land values are falling.
A large problem is that the debt that the developers have was taken out to buy land. But because there is no more demand for property on that land and the banks aren’t willing to lend to the developers to build property on the land a difficult situation has emerged which has impacts on the whole Spanish economy.
The situation is forcing the cost of credit to rise steeply in Spain which contributes to further economic problems.
The Spanish property market still has a long way to go before it is least stable again. If no-one is going to take responsibility for the current problems and take decisive action to come up with a solution, the problems won’t go away any time soon.
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The situation in Spain isn’t looking promising at the moment. People can talk all they want about it improving but it really isn’t yet. There’s a long way to go. The Spanish property market git too hot for too long and this was always the danger.