Of course, the vital question for any property owner trying to sell his home is: how long will the Spanish property crisis last?  The answer is fundamental to any attempt to sell.  It will define any sale price and perhaps whether or not it is actually worth even trying to sell at the moment.

Of course, the future is impossible to predict with any absolute certainty - unless you have clairvoyant capabilities.  Nonetheless, making some kind of prediction is essential.  The alternative is to ‘bumble’ along pretending that no problem exists or, that if one does, it will go away soon – a classic case of ‘burying your head in the sand’.  Whilst this is a comforting way to deal with a problem it is hardly the way to solve it and no way to tackle the potential difficulty of selling your property.

So, how can you possibly consider predicting the length of the property crisis?  Well, as good a way as any is by looking at the facts and then assessing what happened in the past.

Presently, there is little on the Spanish property front (as a seller) that is positive.  Tinsa (a major Spanish appraisal company) have just stated that property prices are likely to drop a further 20% during 2009.  This is quite probable given that in 2009 there are likely to be some 1.5 million new builds for sale and (no-one quite knows) possibly a million resale properties.

To make matters worse, Sterling has dropped like a stone over the past year and has made living in Spain expensive for UK pensioners and those receiving their income from Briton.  This has led to an epidemic of sales on high density British coastal estates in Spain thus creating a downward vortex for property prices there.

Meanwhile, the world credit crunch and associated economic problems have hit Spain extremely hard.  The country is now formally in recession with unemployment predicted by the Spanish government to rise to 16% during 2009.  Some commentators think that this figure is optimistic (given the previous importance of the now collapsed construction industry) and that it may reach a devastating 20%.  Certainly, tourism, one of Spain’s most vital industries is likely to suffer much worse than 2008 when internal tourism dropped markedly.  The recession in Europe will undoubtedly impact badly this year on Spanish external tourism and further compound the country’s problems.

Like the UK, Spain is also still led by the government that has overseen the property crash.  This means that the very people who have been negligent in their handling of the economy remain in power and are, absurdly, those expected to extricate the country from its current problems.  This is about as optimistic a possibility as entrusting the security of the stable to the very man who left the stable door open and led the horse to a field of ragwort.  

Is there a model of what may happen and how long the crisis could last?  In fact, there is and it is probably that of the UK in the 1990s.  At the time, the UK experienced what was considered to be one of its worst recessions since the 1930s.  Although nothing like as bad as the terrifying 1930s depression, the 1990s was a recession in the UK largely based upon the collapse of the property market and high debt levels.

According to the Nationwide it took some nine years for average property prices to do the V (from their 1989 high point to the corresponding level finally reached again in 1998).  Meanwhile, average property prices reached their low point in the 4th Quarter of 1992 and remained much the same until the 2nd Quarter of 1992 – almost five years of negligible price movement before a consistent subsequent rise.

If you accept that the UK property crash in the 1990s is a roughly acceptable approximate model for Spain in the year 2009 then the logical step is to ask three questions: is the present crisis less bad than the UK in the 1990s, much the same – or worse?

I suspect that no-one in their right mind would suggest that the present crisis is less bad than the UK in the 1990s given the staggering personal and corporate debt in Spain - let alone the effective collapse of the world banking system and global economies.  At best, the present crisis is as bad as the 1990s and there are some very good arguments to suggest that it is much worse.

If, for the sake of optimism, we accept that the present crisis is only as bad as the UK in the 1990s then the conclusion that you may draw is that property prices once they hit their bottom (which I doubt personally has yet occurred) will remain at that level for the next five years.  Equally, any return to previous highs will probably take some nine to ten years.  If the present crisis is worse than the UK in the 1990s - then the length of the present crisis is something about which even I have no desire to contemplate.

One thing is for sure, though, and that is if you need to sell now you need everything possible on your side.  This is no time to be passive or blissfully hopeful.  It is a time for tight pricing, a realistic ‘call’ about the future of the market - and aggressive, knowledgable action to prevent yourself being left in ‘limbo’ for possibly years...