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Record drop in Spanish house prices due to bank pressure

Spanish apartmentsRegarding property in Spain, it has recently been announced that the Spanish banks are being forced to put all their property on the market at realistic prices to get their liquidity in order.

This is perhaps the start of the good news. At last we can see an end to the downward spiral, though it’s some time away and we are not at the foot yet. Everyone has known, but it’s never been formally acknowledged, that the Spanish banks have not valued the property to actual market level. Now they will be forced to do so, either by sale of the property or by having such a quantity of property marketed and sold at low prices that higher valuations cannot be maintained. If they had honestly declared the collapse of assets as it was, in the same way as those banks in Ireland and the UK, then the short-term loss of face would have been substantial, but the long drawn out damage that is currently being felt might not have occurred. Continue reading