Tuesday, November 2, 2010

Sunny Spain

Just back from an enjoyable week in Southern Spain, where the fine autumn weather with temperature in the mid 20's felt a world apart from miserable grey Britain.

There still seems to be an awful lot of half finished apartments blocks, and the buzz that existed 3-4 years ago has well and truly gone. The building sites look even worse now the scaffolding and machinery has gone, and I can't see that they are coming back any time soon.

Part of the problem affecting sentiment in Spain still seems to be a complete mistrust of the banks and any official figures. The government says prices are going up, and the largest valuation company says they are going down. And the banks seem to be under suspicion of completely underdeclaring the true value of the repossessed properties on their books. We have friends with an apartment in Calahonda and the bank have completely stopped communicating with them, not chasing for money, not sending warning letters, or threats of repossession. They fully expect to lose the apartment, but in the meantime they are mortgage/rent free - they hav e no incentive to pay when the mortgage is higher than the purchase price would be for the apartment next door, it's an incredibly tricky situation.

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