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Helldorado: How expats dream life in the Spanish sunshine has turned into a property nightmare
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This Link is located in the Public Channel Housing Bubble and Bear Links.
Posted by ian 1 year 314 days ago (dailymail.co.uk).
Views: 81 |
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Sitting in a hotel on the Costa del Sol, a handful of expat Brits are watching the sun set on their dreams of a new life in Spain.
Gathered inside the ballroom of the Hotel Alanda on Marbella's Golden Mile, they are stony-faced as one by one their homes go under the auctioneer's hammer for thousands of pounds less than they paid for them.
Fittingly described in the auction catalogue as "distressed sales", these properties were once the pride and joy of their owners.
Some are holiday homes, others were intended for retirement: all were bought with hope, optimism and excitement.
But the stories behind their "for sale" signs are the most stark warning yet that the Spanish property bubble has finally burst.
Here in Southern Spain, bitter expats talk about "Helldorado" - paradise that has mutated into a nightmare.
Tumbling property prices, a glut of new properties still flooding onto the market and rising Spanish interest rates are taking their toll.
Added to this, illegal building practices mean that 100,000 coastal homes are now under threat of demolition.
For so many years it seemed that the property paradise on offer in Spain was safe from the usual fluctuations of the economy.
Since the 1990s, developers have swamped stretches of Mediterranean coast with apartments and villas in a boom fuelled mainly by British buyers.
House prices have risen 270 per cent in the past decade as discontented Brits, spurred on by TV shows such as A Place In The Sun, sought a sunnier quality of life.
Many of them stretched themselves to get mortgages on homes they believed were cast iron investments. Now, however, they are finding the value of their properties crashing.
Half the 80,000 estate agents in business at the beginning of 2007 were closed by the end of the year. Demand for cement is at its lowest level in 11 years as developers stop building.
And yet by the end of this year, there will be an estimated one million unsold properties on the Spanish market. Another two million lie empty. Add to that the global credit crunch and mounting Spanish interest rates, and as one real estate agent put it this week: "It's like the UK situation on steroids."
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