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Spanish Housing Crisis - The Solution
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Spanish Housing Crisis  -  The Solution

There is a monumental problem with the housing system in Spain that needs to be addressed before anything can happen with the current housing crisis. The Spanish government believes that allowing coastal property to be built by reputable builders who have had no previous financial difficulties will boost the economy. They have aided this by reducing the purchase tax by 50% on new built properties until the end of 2012.

However as a real estate professional, I do not believe that this has helped in anyway. All this has done has taken the prospective purchaser away from the newly built property that has already been built 50 yards away.

Tourist figures for this year have been up on last year and prove that Spain even in the Economic crisis is a highly desirable place to holiday and live full time. So the Spanish government needs to act immediately to stop the housing crisis and finally come up with a figure that they know is the ultimate bank bailout figure. They can then stabilise the banking system and through growth pay off sovereign debt.

The Spanish banks have so much Spanish property for sale on their books through repossessions or builders running out of money and they do not know what to do with it. They are unsure whether to hold on to it for a number of years hoping that the values of the properties will increase or advertise them at their true market value of today and make a huge loss.

There are also a huge number of people defaulting every day due to the high unemployment rates and they are not able to afford the exorbitant mortgage rates from the greedy banks.

There are a number of points that seriously need to be addressed quickly and the Spanish government needs to stipulate these to the banks and to all the autonomous regions of Spain immediately.

  • Instead of the banks repossessing property from people defaulting due to being on benefit after losing a job, the bank should revalue the property at today's market value. They should then sign a new mortgage on the same terms as the previous one and for the same term, however at 1% above Euribor for the first five years. This will keep residents in their homes and not add to the Spanish property for sale the banks already have. The banks can then ask the government for help in the shortfall between the two mortgages as the bailout rather than adding to it the costs of repossessing, court appearances, solicitors fees, administration etc.
  • The banks should also be forced to sell all of their current stock at today's market prices. The Spanish government would only then need to aid them with the difference between the sale price and their mortgage exposure.
  • The Spanish government needs to discount the property purchase tax on all property for sale in Spain not just new properties by 50% until the end of 2015. This will boost the resale market also and get the residents of Spain, not just prospective holidaymakers moving house. Also new immigrants will buy desirable resale properties at the value of new properties, this will also help to move the housing market. However homeowners need to realise that they must have their properties in perfect condition if they expect a sale.
  • The paperwork needed to buy a house needs to be simplified and speeded up. In Spain to make any purchases you need an NIE number. This is like a social security number in Spain so that you can be traced. The current process is the most cumbersome thing I have ever had to do and needs to be changed immediately. Currently you go into your local police station and queue for what could be hours to get an appointment, you then get a form and are told to return on a day within the next two weeks at a certain time with certain documentation and to pay the administrative fee at the bank and bring the receipt. You then get your NIE one month after your second appointment - RIDICULOUS!!! why can't they just have a number of people at a desk who let you know what you need to bring within seconds of you arriving and give you the form, you can then go and get the documentation photocopied and return within minutes to pay your fee at the desk and get your NIE number immediately. This would speed up the house purchasing process no end and not put off people from buying property in Spain.

If this was done the Banks housing stock would decrease, resale properties on the market would decrease due to there being an even playing field on purchase tax and more people would buy due to the process being a lot simpler. Spain has a fantastic culture and it's people are beautiful. However it is being spoilt by politicians who promise but do not deliver.


Street Talk

Isabelle1  

There are so many improbabilities in this statement of purpose. No mention at all is made of the fact that builders notoriously have gotten new construction loans for their clients via the push of "Black Money" which overinflated the list price to get greedy corrupt builders pockets lined to begin the transaction. Then after the dishonest practice of under the table cash they built with bad concrete. Suggesting the money market trade of bad notes erase the cash of the moved notes and start afresh is to undo all contract law internationally and to make up a pretend world of social policy driven trade...the math doesn't work. It's not that simple to just ask a financial institution to erase the value on paper and start over with a new document giving away value, balances due etc. What happens to the debt when we ignore financial good practices and trade law? Oh wait of course we know the answer......Greece.

Reply
  about 9 years ago
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