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Richie · 10-26-2007, 12:31 PM

Another ThinkSpain.com article for you to read and comment on....

â€œThird of estate agents to closeâ€

Spainâ€™s property market is set for freefall with a third of its estates agencies set to close their doors this year.

And new forecast are predicting THREE QUARTERS of the network could be forced out of business between 2009 and 2014.

The doomsday scenario was highlighted by Eduardo Molet, president of the network of real estate experts REI, as the sector enters into a crisis following a fall in demand.

Itâ€™s now forecast that there will be a 20 per cent fall in sales this year, and the construction of new property will be 2.5 per cent lower.

Sr Molet said that more than a third of the 60,000 real estate promoters in Spain will have problems next year.

He said this year would end with 700,000 new homes built in Spain, a crazy number if compared to the rest of the EU. In the UK, for example, the number is only 187,000.

Currently there are 3.1 million empty properties across the country, according to the national statistics institute, and this number will only increase unless there is more demand.

Already some companies are in trouble. Six companies from the Valencian group Llanera have applied for bankruptcy protection. The companyâ€™s debt was 748 million euros at the end of last year.

Don Piso, one of the main companies in the sector, has closed 26 of the 364 offices it had, sacked workers and cut back on advertising. Don Piso says demand is down 75 per cent and it is the banks and savings banks to blame, â€œfor no longer giving 100 per cent mortgagesâ€.

Sources suggest Fincas Corral is expected to close half of its 350 offices this year.

There is good news at last for the Spanish property market with the announcement of the first online auction service dedicated to UK buyers and sellers of residential homes in Spain.

Spanish Home Auctions aims to undercut the traditional estate agent, deliver a quicker result and safeguard buyersâ€™ and sellersâ€™ interests.

The concept is the brainchild of two British experts in the Spanish residential property market, Mike Buckingham and Keith Whicheloe.

Mike Buckingham said they were an auction house and not an agency. For the vendorsâ€™ peace of mind, checks are carried out on buyers to confirm their identity and address.

Your comments on this thinkspain.com article.............

Homefinder · 10-26-2007, 03:28 PM

I have been predicting this for several years.

Here is an article I wrote in 2004 about the Spanish Real Estate and Tourism Crisis.

Surely it is not so much a question now about whether there is a real estate bubble or not but rather what will happen next.

All you guys have made a lot of money out of the real estate boom. You have to start thinking about the future.

Speculation in Spanish real estate, buying off-plan etc. is all over - including the shouting. The only buyers left are those who are looking for a home (or second home) to have, hold and enjoy for years to come and, quite simply, they are not going to be paying inflated prices.

We should all be thinking about this because just a few of us will survive.

I am doing a Survey about which Spanish areas will prove popular for real estate buyers and tourists. If anyone cares to participate they get a valuable backlink and company bio in return for their opinion.

Homefinder

Richie · 10-26-2007, 04:14 PM

Quote:

We should all be thinking about this because just a few of us will survive.

Quite right...

I was in and around Torrevieja yesterday and it was really frightening seeing nearly all the Estate Agencies closed / closing or completely gone, I was out for a good 4 to 5 hours yesterday speaking to other companies and seeing how people were doing.

I felt quite sick when I got back home and in front of the screen that I took the rest of the day off, it is so evident what is going on yet I still see looks of articles and news reports by agents saying everything is great.

It is getting to the stage that the over heads are way too much, down sizing is not really an option for some as you need the space and window space, there is nothing coming through the papers in terms of response, the internet is just ticking over and sales have fallen incredibly.

I really do worry about what is happening in the housing market as it has such a knock on affect on Spain, without Real Estate Spain doesn't have much more to offer (tourism, food/wine export, not much else).

Think of all the industries that run off Real Estate? It's not just the agencies that are affected.

Yet, if I were a buyer now I would be rubbing my hands together in delight, not that I would buy right now, I would give it more time.

What do you think about the Spanish auctions? Do you think this could be the new way of purchasing in Spain for time to come?

It would be disaster if it was.

Homefinder · 10-30-2007, 07:20 PM

It if far worse than you think and worse than is reported.

Spanish Tourism has been declining as well since 2002.
Basically rental expectations based on the number of properties available and toursit days were -

1997 - 21 weeks
2007 - 4.4 weeks

You can read about it here.

Tourism, Construction and associated services employ 25% of the Spanish workforce, so you don't need more than half a brain to realise the the economy is in danger of seriously going down the pan.

Here's a thing. In 2006 Spain ranked 9th of all the world economies Where will they stand in 2008?

But take heart! When they pick themselves up again they will realise that they need us Estate and Rental Agents because we know best how to market the product.

Homefinder