PRICES STILL FALLING IN SPAIN

I brought a property exactly one year ago and I still think it was the right thing to do. I had many a sleepless night over that purchase but so far nothing bad has happened to either me or the house. If I had a crystal ball as to which way the markets were heading I would have used it to get rich long ago. In my opinion the thing with the bank reposessions is often overstated. I had a look around many a bank reposession and not one of them was value for money and there was little room for negotiation. The banks are not letting these properties go for less for fear of unleashing a snowball of further devaluation. Some of these properties had ben empty for a long time and were clearly beginning to decay and crumble. The agent had made some effort to clean them up before our visit but the underlying issue was still obvious. If the banks continue to insist on not letting houses go any cheaper, they may soon be unable to dispose of them at all. I guess that the ultimate fate of many of these houses is the bulldozer as the investment of refurbishing them at a time that so many better properties are avialble for less simply doesn't balance.

This week a global house index report has been released by Knight Frank and Spain is the 6th worst performer,it indicates that values are still dropping. There are still millions of homes unsold and reposessions continue although this is rarely mentioned. As we all agree until employment is balanced, the euro is devalued, Spain reviews it's tax and property legislations and banks start lending again - there is nothing to resuscitate an almost dead market.

Maybe the ECB will have the cojones to make a start at the crunch meeting tomorrow - although it may be to little too late.