Spain Real Estate News

Sightseers come to Spain for the Alhambra, the Gaudis, the beaches. But Spaniards talk about a new set of landmarks, a kind of tourist anti-attraction. You can find them clustered on the outskirts of big cities and around holiday resorts, in Madrid and Valencia. They are half-completed housing estates, often vast areas of empty flats and foundations and property-developers' hubris. Now they are nearly deserted. The Spanish call them ciudades fantasma: ghost towns.

Anyone who wants to understand the challenges facing Spain – and by implication the rest of the eurozone – should visit one. Take the route I did, to a place called Valdeluz in Guadalajara. It's easy enough: board the fancy high-speed train from central Madrid to Barcelona and get off half an hour later. If my experience is anything to go by, only a handful of passengers will spill out on to what is a nearly new station. And there, beyond the bored security guards and the metal railings is … nothing. Another platform for cheap commuter trains, completed but never used, and then acres of red dust and weeds.

Valdeluz was meant to be a dormitory town, with 9,500 houses for nearly 30,000 residents. But the lead developer hit the rocks a couple of years ago, with only around 1,500 units completed and 700 people moved in.

Joaquín Ormazábal is one of those Valdeluz residents. Forty-four years old and separated from his partner, he bought a three-bed flat in the development four years ago for €240,000 (£211,000). Four years later, it's now worth less than €140,000.

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Spanish house prices fell for the twelfth straight quarter in the final three months of 2010, but came close to break-even as the property market struggles to emerge from an extended slump.

In the October to December period prices fell 0.1 percent quarter on quarter, national statistics institute INE said on Tuesday.

That was the smallest drop since quarterly prices began to descend in the fourth quarter of 2007 and much less than the 2.2 percent decline registered in July-September 2010.

However, official data underestimates the weakness of the market and final sale prices, rather than valuation prices used by INE, may have fallen much more sharply, economist at Global Insight Raj Badiani said.

"Despite recent indicators suggesting that the rate of decline in housing activity has been stabilising, the fundamentals point to weak activity across the sector," Badiani said.

"This is a concern for the household economy, given that housing equity constitutes around 90 percent of total household wealth."

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When Spaniard Jose Antonio Langarita decided to buy his own home in 2006, he had no idea of the magnitude of the risks he was taking.

Spain's property bubble had not yet burst, it looked like home prices would soar indefinitely, and that even low-income earners could afford to become home owners.

Three years after being granted a mortgage of nearly 80,000 euros (112,000 dollars), Langarita had unexpected expenses on his car, and he was unable to make the monthly mortgage payment of 450 euros.

At the time, he was earning 1,100 euros a month as a cleaning company employee.

Langarita's home - located in Arroniz in the northern region of Navarre - was put up for auction. When no buyer appeared, the bank seized the property for 50 per cent of its value and informed Langarita that he still owed the lender 28,000 euros.

'I could not understand why - if I had already lost my home, and hardly had enough to eat - I had to continue paying the bank,' Langarita said in an interview with the daily El Pais.

In a ground-breaking ruling, a Navarre court said recently that Langarita did not have to give the bank anything but the mortgaged home.

That ruling and a few other similar ones have sparked a debate on whether Spain's financial institutions unethically plunged hundreds of thousands of people into economic precariousness by granting them mortgages they would obviously have difficulties paying.

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Unions representing workers in the Spanish Airport Authority, AENA, have announced 22 days strike action between April and August in protest at plans to partially privatise the organisation.

Some of the stoppages will be over Easter.

Read more: http://www.typicallyspanish.com/news/publish/article_29520.shtml#ixzz1G5UqGVOL

MADRID — Spanish property sales climbed 5.9 percent in 2010 after three years of sharp declines in the collapse of the real estate market, the government said Monday, in a boost for the battered economy.

There were 491,061 transactions during the year, well below the peak of 950,000 in 2006, the housing ministry said.

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