Brits on the rack as the Spanish eye a possible property crash
A sell-off of real estate stocks in Spain has fuelled fears of a property crash amongst the huge ex-pat British community in the country.
The share prices of leading Spanish property companies have fallen by up to 66% in the past week, with investors worried that the debt taken on by some developers is too heavy for comfort and could cause them credit problems.
There are also over-supply fears as construction is expected to begin on 800,000 homes this year, following 600,000 last year. Research by Datamonitor says that 250,000 homes in Spain are owned by Britons.
The average purchase price of a Spanish property is 300,000 euros in the best areas on the costas and the islands, while it comes in at around 150,000 euros elsewhere.
Builder Brian Ball, originally from Essex, has just completed constructing a villa near Almeria in Andalucia. “I am not worried about any possible crash as I have funded the villa from my own pocket and don’t have money owing on anything there.
“But I do know a lot of people mortgaged up to the hilt on their Spanish property and if the value were to crash then they’d be in a lot of bother.”