A Foreign Office minister warned Spain on Sunday that knocking down British expatriates’ houses was hurting its economy. Chris Bryant, Minister for Europe, said that the country was undermining efforts to create a recovery in its beleaguered housing market. He was speaking yesterday during a visit to south-eastern Spain to meet British expatriates who have been told that their homes will be bulldozed after Spanish authorities declared their construction illegal. The authorities there have been waging a campaign against former officials accused of allowing overdevelopment of coastal regions. Local governments issued building licences for the properties, but these were later nullified following court action instigated by a higher regional government. Mr Bryant cautioned: “The Spanish property market is not going to recover quickly if pictures of bulldozers knocking down expats’ homes are appearing in British newspapers. Everyone I’ve spoken to in Spain says they want to find a solution but wanting a solution and getting one are two different things. He said: “Obviously it’s not for the British Government to tell the Spanish what to do. But I’m pushing the message hard at all government levels that I meet here that they have got to put political willpower into these problems, whether it’s an amnesty, whether it’s a change in the law, whatever the solution is that is needed. That is the point I am pushing. I have to say also that there is an enormous difference between the Britons who just make a cursory legal deal – that is always ill advised – and those who have done everything they should or could have done but still find themselves in deep trouble. Mr Bryant spent the weekend advising expatriates in Andalucia on issues ranging from property rights to health care. He visited Torrevieja, the fastest-growing town on the Costa Blanca, Malaga, the capital of the Costa del Sol, and the town of Albox, where eight British families are fighting demolition orders issued at the end of last year. John and Muriel Burns were among the first to receive the demolition orders in Albox. The pensioners emigrated to Spain in 2001. “They did everything to dot the ‘I’s and cross the ‘T’s that they possibly could have to obtain the permission they required” to build their dream house, Mr Bryant said. But it turns out that the permission should not have been given. That was no fault of theirs whatsoever – but now they face the prospect of having their home demolished. After hearing that his home would be bulldozed, Mr Burns declared that he and his wife would chain themselves to the house. “If this building comes down, then we will be underneath it,” he said. Mr Bryant said he was able to tell worried Britons that the Andalusian regional government was appointing a full-time official to deal with the concerns of British expatriates. The official will provide advice on property regulations, health care and residence requirements. Mr Bryant warned: People buying property anywhere abroad, not just in Spain, have to take at least twice as much trouble as they do at home to make sure everything is legal. It is so easy to go to a lawyer because he’s cheaper. Then later you find out that he wasn’t an independent lawyer at all, but was working all the time on behalf of the land developer and you are really stuffed. Story from The Telegraph

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Bulldozing Expat Homes is Hurting Spanish Economy

The Ministry of Development has just released some statistics that help illustrate the severity of Spain’s construction boom and bust. What is worse, there is no quick solution as much of the trouble is stored up in a new homes glut that will take years for the market to digest. The new figures show that 387,000 new homes were finished last year, despite a property market crash already into its second year. Compare this to the 220,600 new home sales recorded by the National Institute of Statistics for 2009, and you get an over-supply of around 166,500 new homes that joined the glut of new homes languishing on the market in search of a buyer. As a result there might now be something like 1.1 to 1.2 million new homes on the market, the equivalent of the entire housing stock in Madrid. BBVA, one of Spain’s largest banks, put the figure last year at 1.1 million, to which we need to add the new 166,442 finished and not sold in 2009. The developers’ association and the Ministry of Housing are more optimistic in their estimates of between 700,000 – 750,000 new homes on the market, but even at that level it will take years for the market to absorb. How much is too many new homes? It all depends on how many new households start each year, as new household formation drives demand for new homes. Last year, there were around 225,500 new households formed in Spain, down from 300,000 plus p.a. in the boom years. New household formation surged as immigrants flooded into the country and changing demographics and life-style choice (for example and increasing divorce rate) pushed up the demand for housing. But even at the boom level of 300,000 new households a year, it is now clear that Spain was building way too much Spanish property . In 2006, for example, there were 865,500 planning approvals, (though not all of them went on to become housing starts). And in 2007 there were a record 641,500 housing completions. Now even if you assume that demand for second homes was a generous 200,000 per year, Spain was still building something like 200,000 or more excess homes per year. Now they are idling on the market, tying up capital, and dragging down the Spanish economy’s productive potential. At least supply has finally adjusted to demand, though the astonishing collapse in new residential construction is creating economic havoc (a collapse in new building is just as bad for the economy as too much building). Residential planning approvals last year were down to 110,000, the lowest level since the present data series began, and lower even than the 1970’s, when the population was much smaller. A couple of examples will illustrate how severe the shock has been. In Malaga city (550,000 residents), planning approvals have fallen from 7,500 in 2003 to 800 last year. And in Madrid, the Spanish capital, they have fallen from 35,000 in 2003 to 3,375 last year. That’s a drop of almost 90%. Therein lies the key clue to Spain’s serious economic problems. Story from Mark Stucklin

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Spanish Property Boom & Bust

There were two chinks of light permeating the same old economic gloom in this week’s Spanish property news. First, even though Spain is still officially in recession, consumption in Spanish households increased for the first time in two years. This is still a far cry from a booming economy - but at least it’s a move in the right direction. Second, Despite the news that mortgage lending is down 34% , news of competitive 100% mortgages could be just what the market needs to catalyse Spanish property buying again. One other piece of news which I’ll stick my neck out and interpret as ‘good’ is that the Spanish protests organised against raising the retirement age by two years have been poorly supported . I have no particular feelings either way about the wisdom of this pension reform - but I do feel strongly that striking is the very worst thing for Spain’s fragile economy. Yes, the politicians messed up. Yes, they should be held accountable. Yes, they should find workable solutions to revitalise Spain’s economy and reverse the spiralling unemployment rate. But striking won’t make those things happen - it will only delay them. For their part, Spain’s politicians are playing ‘fast and loose’ with the media. When speaking to international journalists and investors, they emphasise the austerity of the country’s economic plans - in an attempt to sooth investor nerves and cement Spain’s line of affordable international credit. Meanwhile in Spain, these same politicians are emphasising how it’s ‘business as normal’ and that there will be no significant cuts in public spending and no erosion of benefits. The upshot of this - since we live in an age of Google translate and the Internet - is that neither foreign investors, nor the Spanish people have any faith in anything the government says. They’re clearly ‘bending the truth’ at least 50% of the time, if not 100%. Over on the Kyero blog, we’ve discovered a way of getting Google to send you property alerts - even when the web site you’re using doesn’t offer that functionality. We apologise for annoying you with our signup forms, and we ask whether translating property descriptions really makes sense? If you have an opinion about these topics, please leave a comment and join in the conversation. Martin Dell, Kyero.com

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Spain: Two or Three Reasons to be Cheerful

Spain tries to hide under the smokescreen of an International conspiracy, TINSA is revealed as not-quite-so independent after all, and two pieces of good news for Spanish finances. In a bizarre twist this week, Spain hit out at English-language news agencies conspiring to bring down the Euro and the Spanish economy. As the writer of The Zapping of Zapatero in the Economist answered: “To this piffle the best retort is: grow up”. Mr Zapatero, however, continues to insist that Spanish economic recovery is near - something that economists outside the country have a hard time agreeing with because the Spanish government haven’t fleshed out their recovery plans. However, two pieces of good news for the Spanish economy broke this week - shoring up international confidence in the country. First, Spain enjoyed a strong bond issue - raising €5 Billion. A bond is basically an IOU from the Spanish government and, the fact that it sold out quickly is a very practical demonstration of how confident the world’s financial markets are of Spain’s ability to repay that debt. Second, the International Monetary Fund stated that Spain is not Greece . A spokesman said: “Spain has robust economic statistics and institutions with a solid history and credibility”. It seems that despite the constant news and rumour-mongering, investors are more than willing to continue investing in Spain - all conspiracy theories aside. Moving on from the world of Spanish politics and finances, please check out Nick Snelling’s new article: What the Spanish Coastal Law Really Means . If you are thinking of buying a Spanish property anywhere near the sea, it’s important to be ware of this fuzzy piece of legislation. Last week, I sang the praises of property valuations company, TINSA. Chartered surveyor, Campbell Ferguson was kind enough to email me this quote from Fuster Associates, a legal firm in Murcia: The biggest valuation companies, such as Tinsa and Tasamadrid, are connected with savings banks and the banking industry; “hence, every time they value a home at less than its former value, their own assets depreciate”. To put it another way, “to admit that homes have come down in price is tantamount to admitting that the assets which back up loans have fallen.” Hmm, so maybe my assertion that one of TINSA’s advantages is that they’re independent is suspect - that’s certainly true in the opinion of this Spanish commentator who said: “You trust the valuations of a company funded by more than 30 savings banks? Bad analysis.” I admit that the independence of TINSA may be questionable - but I do stand by the fact that their index trend is the only data series which tallies closely with what we have observed in practice. Moving on .. We started a new Kyero blog last week to let you know what we’re up to behind the scenes here. Some of the posts are quite technical, some aimed at estate agents, others at the general public. Some talk about functionality we’re developing, and others about problems we’re trying to fix. I hope you find the posts interesting and decide to comment and have your say if you feel strongly enough about a particular subject. Martin Dell, Kyero.com

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No Spanish Conspiracy Theory Required

Spain was the last major European economy still in recession in the fourth quarter, final data showed on Wednesday. But the markets gave some cheer to the Socialist government, as signs arose that fears surrounding sovereign debt in the euro zone may be easing for now. The National Statistics Institute reported that the Spanish economy shrank by 0.1 percent in the fourth quarter from the previous quarter, in line with a flash estimate made last week and better than the 0.3 percent decline in the quarter before. It was the seventh straight quarter of contraction for Spain, meaning the country has been in recession almost two years. Joblessness has neared 19 percent in the country following the disappearance of the easy credit that fueled a Spanish property boom during the previous decade. Prime Minister Jose Luis Rodriguez Zapatero called for the opposition to back its austerity measures to rein in spending and help reassure the markets. But he also celebrated the solid results from a government bond issue Wednesday as showing the market panic over Spain’s accounts had been unjustified. “Spain’s solvency as a country is unquestionable,” he said. Spain drew a stampede of demand for the issue — €12 billion of orders for a €5 billion syndicated 15-year bond, according to IFR, a Thomson Reuters service. The pricing was at the low end of the initial guidance. Neighboring, debt-ridden Portugal, seen by markets as the next domino to fall if Greece were to have payments problems, saw its borrowing costs fall. It sold €1 billion of 12-month treasury bills at a lower average yield of 1.173 percent in another well-bid auction. Analysts had said a successful Spanish sale could open the door for Greece to offer a planned 10-year bond. European Union leaders pledged support last week for Athens’ plans to shrink its huge budget deficit but stopped short of financial aid. “Good news in the euro zone periphery is also good news for Greece,” said Leonidas Fragiadakis, group treasurer at National Bank of Greece, the country’s biggest bank. In Spain, Mr. Zapatero has been lambasted in the media for his response to the Greek debt crisis. He tried to regain the political high ground Wednesday by calling for the opposition to support legislation meant to restore the Spanish economy to fiscal and competitive health. “The government is asking for and offering consensus, with good will, involving all the groups in this house,” Mr. Zapatero said in a speech to parliament a week after King Juan Carlos said political parties, business and unions should come together to dig Spain out of its hole. But Mr. Zapatero’s call for the legislation to be approved by consensus in the first half of the year met with a cool reception from the leader of the conservative opposition, Mariano Rajoy, who suggested the prime minister resign. Economy Minister Elena Salgado will lead talks with other parties over key measures, including a €50 billion savings package designed to cut Spain’s budget deficit from 11.4 percent of GDP in 2009 to the mandated E.U. limit of 3 percent by 2013. “We’re committed to these projects,” Mr. Zapatero said, but added: “But we are open to talk about other issues or to discuss different emphases with regards to these projects.” Mr. Rajoy said Zapatero’s proposal lacked credibility. “It’s not Spain that inspires lack of confidence, it’s you and your government’s way of handling the economy,” Rajoy said, asking for the government to reverse tax increases, including a rise in value-added sales tax. There were some encouraging signs in Wednesday’s economic reports: Data showed fourth quarter household consumption rose by 0.3 percent in quarter-on-quarter terms, the first rise since 2007. Mr. Zapatero said he expected the economy to resume growth in the first half of the year, but economists were not convinced a serious turn around was likely any time soon. “It’s going to come in handy for the politicians to say ‘We’re coming out of recession,’ but it’s not going to make any material difference,” said Jose Garcia Zarate at 4Cast. “2010 is going to be a very rough year, not as rough as 2009, but pretty rough anyway.” While the spread on Spanish Treasury bonds has spiked during the Greek worries, many economists say that the country’s relatively low level of public debt to GDP means it faces little immediate financing problems. Story from NY Times

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Spain Cheered by Strong Bond Issue

Recent periods of heavy selling in the Spanish stock market, in the wake of fears that worries over Greece will spread to other European nations, is reportedly being investigated by the country’s intelligence service. The unit of the National Intelligence Center that deals with economic intelligence has spent the last few weeks discussing the matter with Spanish companies and the stock exchange as well as other experts, according to a report in El Pais’s English edition on Monday. An official could not be reached for comment. The newspaper said the investigation is looking at whether there was any collusion in attacks by investors and the hostility shown by some sectors of the U.K. and Spanish press. Over two weeks ago, Spain’s IBEX-35 saw its biggest one-day loss since 2008, in the wake of worries over Greece and fears Spain might have similar economic worries. See related story on Spain The government has been battling a tidal wave of bad news and sentiment from inside and out. Prime Minister Jose Luis Rodriguez Zapatero has hinted on a number of recent occasions that criticism by the U.S. and British media is part of an effort to undermine the euro. El Pais said in private he has been taken aback by just how aggressive some parts of the foreign press have been with Spain. Paul Krugman, the Nobel prize winning economist columnist with the New York Times, is practically persona non grata for his comments on Feb. 4 after a blog posting that said Spain was the euro zone’s biggest trouble spot. Salgado responded by saying that analysts and media from outside the euro zone did not understand how the bloc worked. Krugman was at it again on Monday, writing in his column for the New York Times, that Spain’s core economic problem is that prices and costs have gotten out of line with those in the rest of Europe and there isn’t much that the government can do to make it better, as its economy is locked into the euro. “This is McCarthy-style witch hunting,” said analysts at UBS in a note to investors on Monday, in response to the report in El Pais. “Spain was a victim of joining an inappropriate monetary union and a Ponzi scheme housing market.” Story from Market Watch

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Spanish Intelligence Investigating Market Slurs

Spain is relying on history to convince investors it will find an escape route from Europe’s fiscal crisis faster than Greece. As investors start to question Spain’s ability to cut the euro region’s third-largest budget deficit, Deputy Finance Minister Jose Manuel Campa yesterday reminded them that “we have done it in the past.” In the early 2000s, Spain turned a shortfall into a surplus within six years of joining the euro. When Greece squeezed into the bloc in 2001, the country immediately let its deficit swell back beyond EU limits. “We don’t think they’re AAA by any means, but they’re certainly not the basket case that you’ve seen in the case of Greece,” said Harvinder Sian, a bond strategist at Royal Bank of Scotland Group Plc in London. “The fact they have demonstrated the ability to reform in the past is a positive and one of the reasons you can’t really take the Spanish issues too far.” Spain is getting sucked into a market selloff that started in Greece in November and has since spread across the southern edge of the euro region. Credit-default swaps on Spain rose to a record yesterday and the spread between the country’s 10-year government bond and its German counterpart increased to the most in almost a year. Standard & Poor’s last year cut its outlook on Spain’s AA+ credit rating to negative. Investors are selling Spanish assets even after Prime Minister Jose Luis Rodriguez Zapatero’s government published a 50 billion-euro ($69 billion) cost-cutting plan to help patch up the deficit and return it to the EU’s limit of 3 percent of gross domestic product. “Look at the history,” Campa, a former Stern School of Business professor, told Bloomberg Television in an interview yesterday. “We have done it in the past, which proves our commitment, the quality of our public finances, and the success of our fiscal discipline,” he said yesterday in London. Spain, which had a shortfall of 6.5 percent of GDP in 1995, cut its deficit in the run up to joining the euro in 1999 and kept it close to balance before reporting a surplus in 2005, which it held on to through 2007. By contrast, Greece’s deficit had widened to 7.5 percent within three years of joining the euro. Spain’s debt burden, at 54 percent of GDP last year is the lowest among large western European economies and compares with a euro region average of almost 80 percent, according to data from the European Commission. Greece’s debt burden is about double Spain’s as a proportion of the economy. “Spain has lived with very significant public savings plans before,” said Ivan Comerma, who helps manage around 3 billion euros of assets at Banc Internacional-Banca Mora in Andorra. “Unfortunately the global economic context is not going to help, so it will take longer.” European officials have nevertheless turned their fire on Spain. Monetary Affairs Commissioner Joaquin Almunia on Feb. 3 grouped it with Greece and Portugal in saying they had all suffered a “permanent” loss of competitiveness. European Central Bank President Jean-Claude Trichet told all countries with excessive deficits to rein in their shortfalls last week. Spain’s budget deficit, at 11.4 percent last year trailed only Greece and Ireland. Spain has been in a similar position before. Following a banking crisis and recession, the deficit swelled to 7 percent in 1993, prompting then Finance Minister Pedro Solbes to cut spending and increase taxes. The debt burden, which stood at 63 percent in 1995, fell to 43 percent a decade later, when Spain posted its first budget surplus since the country returned to democracy in 1978. Still, the government may be banking on more growth than is realistic. Its deficit-reduction plan forecasts GDP growth of 3.1 percent in 2013, compared with a projection from the International Monetary Fund of 1.7 percent. Spain’s achievement in wiping out its deficit also rested on a construction-led boom that fueled average economic growth of 4 percent per year over the previous decade. “In those years even I would have created a surplus,” said Juan Rubio-Ramirez, a professor at Duke University and a visiting scholar at the Federal Reserve Bank of Atlanta. “It was easy to make a surplus, the difficult question is why we weren’t posting 3 percent surpluses.” Campa said yesterday further steps would be taken if growth missed the government’s forecast. Finance Minister Elena Salgado has pledged to cut the deficit to 3 percent by 2013 and announced last month 50 billion euros in spending cuts. The government wants to raise the retirement age to 67 from 65, although the measure, and a complementary proposal to increase the number of years used to calculate pensions, must be discussed with other parties. The government projects the deficit to fall to 9.8 percent of GDP this year, 7.5 percent in 2011 and 5.3 percent in 2012. “It’s realistic yes, it depends on political will, and it does need strong political will,” said Ciaran O’Hagan, a fixed income strategist at Societe Generale in Paris. Story from Business Week

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Spain Relies on History to Reassure Investors

Who to believe? In the news this week, one commentator declares the Spanish property industry bankrupt. At the same time, a developer in Almeria has raised prices as a “signal that things are getting better”. In Spanish Property Industry Bankrupt? , we read that developers have raised the cost of credit for the entire nation and that Banks are buckling under the weight of their toxic real estate assets. Compare and contrast: Spanish Developer Increases Prices where we read that one developer in Almeria has increased property prices by €30,000 per unit to “give a signal to people that things are getting better and they should have faith in the situation”. Personally, I think that sounds like hogwash, and their justification that: “Almeria is one of the up-and-coming areas of Spain so it’s not as overbuilt” is too broad a statement to warrant any credibility at all. As I mentioned last week , I actually do believe that things are picking up in Spain - perhaps not for any sound economical reason - but this kind of baseless hype does Spain’s faltering recovery no good at all. World attention has been focused on Greece and the possibility of it defaulting on its sovereign debt. Now that the EU has gone in mob-handed to sort out the Greek situation, attention has passed to the next most risky countries on the list. Enter Portugal & Spain. The situation in Portugal is undoubtedly worse than in Spain - but the Portuguese economy is so much smaller than that of Spain. This leaves Spain as the most significant European economy at the most risk of being unable to balance its books. Unfortunately, the policies of Mr. Zapatero have failed to inspire confidence. Spanish policy is being seen as all ‘bark’ and no ‘bite’. Mr. Zapatero’s refusal to deal with Spain’s labour and government inefficiencies is further damaging Spain’s international reputation - and credit rating. If this is the first Property Pulse newsletter you’ve read, you might be wondering “What’s this got to do with the Spanish property market?” The short answer is: Everything. The Spanish property market is, not surprisingly, dominated by Spanish buyers. 90% of properties sold will be sold to Spaniards and, even though the remainder will involve foreign buyers, the market is geared around and driven by Spanish buyers. 4 million of the country’s workforce are currently out of work. Spain is still in recession and nursing a huge hole in the public purse from a prolonged bout of spending designed to promote growth. While that tactic has worked elsewhere in Europe, so far it has only served to slow Spain’s slide further into recession - with a ‘recovery’ hoped for sometime later this year. The net effect of all this doom and gloom is that the majority of Spaniards are unlikely to take any kind of financial risk - risks like moving home or upgrading to a more expensive property. Spanish first-time-buyers have, quite literally, no way of getting on to the property ladder in Spain. Hence there is very little movement in the domestic Spanish property market. So, the demand for housing is suppressed, and the domestic buyer sets the benchmark for property prices in Spain. This is where foreign buyers of Spanish property can benefit from the inherent weaknesses of the Spanish economy - and the relative strength of their own - particularly other Euro countries such as Germany, France and the Netherlands. That’s why keeping an eye on Spain’s policies, its economy, its unemployment rate, its bank rates, foreign exchange rates and all the other financial indicators is a smart thing to do if you’re thinking of investing in a Spanish property. And that’s what we do here in the Property Pulse newsletter. Martin Dell, Kyero.com

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Spanish Property: Hogwash or Hope?

In a somewhat shocking and worrying statement, a leading Spanish lender has declared the country’s real estate sector is ‘bankrupt’. According to Santos Gonzalez Sanchez, president of the Spanish Mortgage Association who speaks on behalf of the country’s mortgage lenders, there is so much debt in the industry that finance for property development has effectively dried up. ‘The real estate sector is bankrupt,’ he said, pointing out that Spanish developers had a combined debt of €324 billion in the third quarter of 2009, the equivalent of around 30% of Spanish GDP, according to figures from the Bank of Spain. The interest bill alone is around €15 billion a year. More than 50% of the debt was used to buy land for which there is now no market. ‘Whilst those plots of land are not properly valued, the financial system can’t start afresh and won’t be able to finance new homes,’ Gonzalez told the Spanish press. ‘The viability of the Spanish property sector is in question and it is putting the financial sector in danger,’ he warned. Gonzalez added that something drastic needs to be done. He said that the Government or the Bank of Spain needs to take a lead in tackling the problem instead of ‘looking the other way’. Some experts believe that Spain needs to create a ‘bad bank’ where all the toxic real estate loans can be dumped, freeing the banks from their bad debts and enabling them to start lending again. Gonzalez also warned that the situation has wider implications as the situation with the developers is pushing up the cost of credit for the whole Spanish economy. ‘The developers’ debts affect the credit ratings of the financial institutions, with all the consequences that has for a sector that still hasn’t fully recovered its liquidity. The financial system will have to explain how long it can bear this situation,’ he added. Experts are also warning that Spanish banks may have to deal with a tidal wave of repossessions this year, with big implications for the property market. The auctions banks normally use to dispose of repossessions are struggling to attract buyers, as the credit crunch has hit even the opportunists who traditionally bought at auction. Spain’s General Judicial Council forecasts 180,000 foreclosures this year, up from 114,958 last year. With few buyers at auction, banks will have to take back the properties onto their books at the write-off price of 50% of valuation, which implies recognising a loss. That could have big implications for the banks and the property sector in general. The big question is what impact this new batch of repossession, the equivalent of 15% to 20% of the current inventory of property for sale, will have on the market. These properties could end up dumped on the market at write off values that will send prices down. Story from Property Wire

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Spanish Property Industry ‘Bankrupt’?

The overseas homes market may have already entered recovery in some parts of Spain as one developer has started putting its prices up. Key Mare in Almeria has seen sales rise by 30% in the last three months and now has more international customers than Spanish ones. The company raised prices across its seven resorts in the area by €3000 per property at the start of January. “Almeria is one of the up-and-coming areas of Spain so it’s not as overbuilt as other parts of the coast,” said the company’s head of international sales, Stefan Kdist. “The Spanish have always known this area but now more British and Scandinavian buyers are finding out about it.” Until now, the company has been following the line of many Spanish developers and offering discounts of up to 25%. Developers and banks have been under pressure to lower prices further to help shift the large amount of unsold Spanish property accumulated during the boom. This tactic has worked to some degree, with companies such as Taylor Woodrow seeing sales improve in the last three months by offering discounts of up to 40%. Kdist said Key Mare’s sales increase represented an improvement in confidence but he also hoped the price rise would encourage buyers to feel better about the market. “We wanted to give a signal to people that things are getting better and they should have faith in the situation. Today, people don’t feel there’s such a risk of losing their jobs as they did a year ago. Most economies are recovering and prices and interest rates are low.” With many agents and developers in Spain still suffering the effects of the economic downturn badly, Key Mare’s success emphasises how diverse the market has become. The latest data on the Spanish housing market paints a generally negative picture. Prices continued a steady fall in the fourth quarter of 2009, dropping 6.2% year-on-year, according the country’s housing ministry. The number of transactions also fell 2.6% year-on-year in November, although this was down from a 21% fall in October and transactions rose 5.3% between the two months, according to the National Statistics Institute (INE). But there was some good news in that the number of mortgages rose 1.8% year-on-year in November 2009, the first increase since April 2007, according to the INE. Story from OPP (Registration required)

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Spanish Developer Increases Prices