Spanish
Banks Could be Forced to Reduce Prices on Repossessed Properties
The Spanish government recently introduced a new rule that
could see Spanish banks forced to lower the prices on properties that were repossessed during the recession. The new law was introduced on October 1st
and it will banks forced to reduce their exposure to Spanish real estate.
Spanish banks found themselves the largest landlords in
Spain during the recession of 2008 – 2012 as they possessed a number of homes
following mortgage holders being unable to keep up with repayments.
Many banks also took the chance to purchase unfinished
properties from developers that sold them off cheap to escape, or as a result
of, bankruptcy.
All of this led to price suppressions across Spain as banks
were eager to get these properties off of their books. Following the
stabilisation of the housing market in recent years banks are now following
suit with everyone else and are pricing their assets at current market rates.
The Bank of Spain would still like to see the Spanish
banking sector take steps away from the real estate market and let the real
estate market become an independent industry again. Many property experts feel
that this could cause many costa del sol low-price and reduced offers as the Spanish banking regulator
clamps down as the fastest way to get rid of a property is to sell it at a
reduced price.
Spanish Property Insight founder Mark Stucklin said that if
banks are forced to offload their properties then it gives them the freedom to
offer lower prices. Even though the Spanish banking sector is still continuing
to offload assets they remain a large part of the real estate market and
Spanish banks controlled around €84 in property assets at the end of 2015.
It’s likely that consumers will welcome the news. Spanish
property prices have stabilised recently and there are places where prices have
even risen. As such many would welcome some low-priced homes entering the
market and giving the industry a shot in the arm by providing many Costa del Sol property bargains for
first time buyers looking to get on the property ladder.
