Words: Ashley Rigg
Published: 29th Octber 2009
Spain: Banks 5 Developers 0
A new report on the Spanish property sector by business consultancy DBK is predicting a big fall in the number of property developers in business in 2010 with a sharp increase in property sales activity by banks.
The report says that banks hold all the aces and have a huge competitive advantage over developers in terms of financing and forecasts that this will exacerbate the trend of banks operating as estate agents selling discounted stock. The number of bank owned properties on the market is also set to grow after
new legislation that changes the way banks “profits” are calculated was announced this week.
Continued over-supply
Though housing starts are falling dramatically, down 45% so far this year, and forecast to reach just 200,000 at year end (compared to 360,000 last year, and 760,000 in 2006), the supply of new properties coming onto the market still outstrips demand says the report. DBK forecast there will be 350,000 new home completions this year, and 200,000 in 2010 which contrasts sharply with the 600,000 a year in 2006 and 2007.
Unfortunately, the problems for Spanish developers look set to continue for the foreseeable future and the banks, that have contributed significantly towards the downturn in demand, look well positioned to take advantage.
Further coverage on
Spanish Property Insight.
Related Links