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PROBLEMS GALORE
“In 2008, we seem to have been crashing into wave after wave of negative publicity, and lurching from one problem to another.
Besides the usual issue of often inaccurate media sensationalism that seems to have stalked the Spanish property market for the last 3 years, we have had to endure far more serious global economic events that have squeezed the very life out of the market:
- The Credit Crunch
Most Spanish properties along the ´costas´ are purchased as 2nd homes in the sun, and naturally this means that most of these homes are mortgaged. Once the supply of available finance dried up as a result of the ´Credit Crunch´, the primary method of purchasing a Spanish property was effectively no longer available for most of us.
- The Onset of Recession
As we teetered on the brink of recession during the 2nd half of 2008, the global economy began to occupy our every waking hour. We suddenly began to take an interest in how much we were spending, and what we were spending it on – we began scrutinizing our receipts from Tesco, we were checking to see how we could save on our energy bills – for goodness sake, we even started shopping at Primark! We battened down the hatches, banished thoughts of all things unnecessary - new cars, exotic foreign holidays and expensive nights out – and focused simply on surviving - earning sufficient funds to provide food for our families. It´s little wonder that our thoughts of a 2nd home in Spain were consigned to the proverbial ´back-burner´!
- The Collapse of the Housing Market
As we all decided to stop spending, and as the supply of easy credit was abruptly halted, so demand for worldwide property dwindled rather predictably. As the gloom shrouded us all, we witnessed greater anxiety amongst owners of Spanish properties, becoming even keener to offer discounts and deals to help them dispose of their unwanted assets.
- The Collapse of Sterling
And then as if we didn´t have enough to deal with, along comes a record slide for Sterling to effectively wipe out the largest single group of Spanish property buyers – i.e. the Brits. From highs of €1.51 in January 2007, to today´s record low of €1.02 – the demise of sterling has contributed hugely to the mess that we find ourselves in today. Apart from the odd exception, the Brits have turned their backs on buying properties in Spain.”
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