In news today from Madrid, the Bank of Spain has make it public that it has demanded that come the end of this financial year, the banks and building societies holding property will have to reflect a 20% drop in value in their balance sheets.
Banks hold property as a result of purchases they make for investment reasons or due to repossessing property from people unable to pay their mortgages or other loans that may have taken property as collateral.
This spells good news for potential inevestors as Spanish banks have, to date, been reluctant to drop prices even in the face of interested buyers. The so called “repossessions” market has not truly taken off due mainly to the bank’s reluctance to accept any price drops.
“The banks are ultimately against selling at a loss. Like all investments, only when the sale is made is the loss properly reported, something that managers and share holders don’t like seeing.” Says Helen Smith, from Compass Amazing Resort’s overseas office. “However, the banks can not hold on to these properties for ever. This move by the Bank of Spain is great news for the overseas buyer and invester. It’ll free up property that to date has been too highly priced."
Also today, Spain, currently holding the presidency of the European Union, has announced a public debt of 4 billion Euros while Brussels has given details of a plan to aid the ailing Greek economy. Both of these may seem like bad news for the UK buyer of Spanish property but the expectation in the market now is that the Euro will fall against the pound. Indeed, The City of London report more than 7 billion sterling has been placed “short” against the Euro. This essentially means that the Euro is most certainly expected to drop soon. Good news for us Brits wanting a deal in Spain, or any other country in the Euro Zone!
Banks hold property as a result of purchases they make for investment reasons or due to repossessing property from people unable to pay their mortgages or other loans that may have taken property as collateral.
This spells good news for potential inevestors as Spanish banks have, to date, been reluctant to drop prices even in the face of interested buyers. The so called “repossessions” market has not truly taken off due mainly to the bank’s reluctance to accept any price drops.
“The banks are ultimately against selling at a loss. Like all investments, only when the sale is made is the loss properly reported, something that managers and share holders don’t like seeing.” Says Helen Smith, from Compass Amazing Resort’s overseas office. “However, the banks can not hold on to these properties for ever. This move by the Bank of Spain is great news for the overseas buyer and invester. It’ll free up property that to date has been too highly priced."
Also today, Spain, currently holding the presidency of the European Union, has announced a public debt of 4 billion Euros while Brussels has given details of a plan to aid the ailing Greek economy. Both of these may seem like bad news for the UK buyer of Spanish property but the expectation in the market now is that the Euro will fall against the pound. Indeed, The City of London report more than 7 billion sterling has been placed “short” against the Euro. This essentially means that the Euro is most certainly expected to drop soon. Good news for us Brits wanting a deal in Spain, or any other country in the Euro Zone!
Buen viaje!
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