The 90’s recession took about 6 years to get back to any normality. This time the recession is much deeper and so it will take longer to get back to level. Think of 1999/2000 property values as normal and all the price increases after as froth from speculation. I remember being told in 2002 that house prices just couldn’t stay at the current valuation level and were bound to collapse!
Also bear in mind that as bank, caja and other financial lenders become stronger they can afford to write off more companies, liquidate or bankrupt them, to clear their books. The banks have reduced their staff to a minimum and don’t have time to deal with the problems of people and businesses they see as ‘losers’ and so will take the loss and move on. The banks want to concentrate all their time supporting winners who will bring them assured income. It’s always been the way that as economies climb out of recession, there are more bankruptcies and liquidations and suffering for individuals. So don’t expect smiles on the general population’s faces for some years to come.
However, for foreign investors, those with earnings that depend upon non-Spanish economies or the lucky few who have found a profitable niche in Spain, values of good properties in good locations haven’t been so low for more than a decade. Valuations are even being predicted to rise by 5% this year for the best properties in places like Marbella. Bear in mind, with the high costs of buying and selling plus inflation, they’ll have to exceed 20% to just get your money back! So, investors have to be looking to the long term unless they stumble upon a really, really desperate seller who is giving the property away for the minimum amount of money they need, which has no relationship to overall property market values. The core of the market is buyers intending to be residents, either permanent or part-time, and also renters with the same intentions. It’s those ‘value creators’ who provide the basis of all values and to whom our local economies have to cater for.
This is a response to an article in http://www.culturespain.com/2013/10/31/end-recession-spain/#comment-31187
