Spanish property bargains sparked by recession fears

Country:  Other Spanish Places, Spain; Spain

8 August 2008

Spain’s economy, the fifth largest in Europe, is reportedly on the verge of a recession, following drastic falls in industrial output levels in June.

There are already deep concerns regarding Spain’s residential building sector, where oversupply, rising interest rates and tightening credit conditions have almost paralysed activity in parts of the country. Furthermore, the construction downturn has caused recent unemployment levels to soar.

The economic slowdown is having a detrimental effect on Spain’s housing market. Average property prices fell 34% year-on-year in May, with further price declines anticipated.

A spokesperson for the Spanish Institute of Economic Studies said: "The crisis goes well beyond the construction sector. This is very negative data that shows that inflation is starting to have a second round of effect".

Editor’s comment:
With a growing number of distressed homeowners in Spain, now appears to be a great time to negotiate a below market value property purchase. Better still - the UK pound is expected to strengthen against the euro currency over the coming months, which will further lower the cost of buying property in Spain, along with the rest of the eurozone.