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Banks have a unique status in our society. Powerful, and able to drive the economy, they seem heartless and ready to put profit above any moral or human principle. Why not just say this when it seems to be a generally held view? They were vital in the good times when people needed money to fund projects – to buy a house, for example – but in recent...
We said that on the 30th November and it is confirmed. The President of the Society for the Management of Assets of the Bank Restructuring (SAREB), better known as the “bad bank”, that was recently created to absorb the “toxic” assets from Spanish Banks, Belen Romana, trusts that the housing market will not be destroyed with the sale of its assets. In her first press conference since the...
The bad bank does not really matter for overseas buyers and investors: What matters is buying now at the lower ever price and minimizing risks. Property market prices are reaching rock-bottom in main cities. In city centres and in prime coastal areas prices are stable. We understand that the creation of the bad bank will not much affect this trend. Moreover, the bad bank may help things to...
Banks have accumulated 140,600 finished Spanish real estate assets that could already be for sale. The banks’ portfolio of Spanish properties for sale has a rough value of 26,700 million euros, but in little more than a year it will be devalued by 35%, according to the firm CB Richard Ellis. This is the provision that the executive branch of government demands for finished housing in its restructuring...
46% of the property business in which Banks are involved is high risk according to the Bank of Spain. Week after week the property business becomes a bigger burden for a banking system that needs to move on. Lower credit and a higher interest rate do not seem to encourage both lenders and borrowers. The market can only be reactivated by pricing
According to the Banks’ Financial Products Agency (Agencia Negociadora de Productos Financieros), during 2010, Spanish banks have already taken over a total of 118,000 properties from debtors. 30% of these repossessions could have been avoided if the banks had refinanced the mortgage.
To solve the stock of the property market in Spain may take more years than expected. The Bank of Spain has reported that the Spanish banks hold a stock of nearly half a million houses. Taking that figure into consideration, certainly the Banks have guaranteed to play the main role in the sector.
Signs of Spanish property market recovery in June/July with a 4% price rise seem to be vanished. Banks tend to finance the assets that they reposed in order to sell them again. Banks offer a 100% finance to encourage investors to buy a property. Obviously the buyer must be a credible client with a low risk score.
