When you read encouraging news about a slight increase in property sales on the Costa Blanca, it makes you wonder what effect that might have on the value of your home. For those who are keen to sell up and return to England this is particularly important information.
Sad to say that the prospect is still gloomy, prices are still falling and have a long way still to go. The fall so far averages out at 27% from the peak of which 10% was lost last year. Informed sources say that prices will drop a further 20% before there will be real signs of recovery.
The “bad bank” set up to mop up toxic debt has tens of thousands of houses on its books from those banks that required a bailout. It is predicted that Sareb, as the bad bank is called, will eventually hold 65bn euros of property to sell over a ten year period.
The banks in Spain are still owed 270bn euros of which a third is considered to be toxic debt. It is therefore going to be sometime before Spain needs to build any more new houses.
If prices had fallen by similar amounts in Britain then there would be no problem for those looking to return but that is not the case. Only in Northern Ireland and some parts of Britain have prices dropped by percentages anywhere near equal to those in Spain. For those wanting to move back to London, the situation is hopeless because, in the capital, prices never dropped at all and in some boroughs they have actually risen.