Summer in Spain
In Europe the property
figures are still skewed by the political and economic mess that
goes by the name of the EU. Let me start with Spain as it is
probably the most popular destination abroad for Brits.
On the one hand there is still a vast backlog of unsold
properties. Behind this avalanche of empty homes is the backlog
of foreclosures still on bank books but not on the open market.
This massive backlog will hold prices down for the rest of the
decade at least. There will be small movements up and down, but
basically prices canít rise much with that overhang threatening
the market like a bank of thunderclouds.
On the other hand, in the most popular areas the most desirable
properties are selling reasonably well although at greatly
Another problem area is the exchange rate which has entered an
uncertain zone. This uncertainty may continue for several years.
There is no way of predicting how this will turn out. There are
two reasons for this.
The first is the Greek melodrama. The obvious conclusion to this
matter is for Greece to leave the euro and go back to the
drachma. Unfortunately, this is not a business matter but a
political one, and politicians are, generally speaking, not in
touch with the real world. I therefore expect more and more
fudging which wonít solve anything, and will probably make
matters worse. In short, we have an ongoing uncertainty, and
markets hate uncertainty, so the euro will stay in the doldrums.
The second is that little matter of economic resilience. One day
the market recovery is presented as happening. The next day all
is doom and gloom again.
There appears to be the beginnings of a recovery in Spain. That
will put more people back to work, and lead to a small rise in
wages, and this will tend to lift the property market.
On the other hand, we have a resurgence of the age-old Spanish
problem: regionalism. A significant indicator of this is the
recent booing of the national anthem at football stadiums. To
what extent this can be taken as a serious indicator is
debatable, but there have always been regional problems in
Spain. The most vociferous are the semi-autonomous zones of
Catalonia, Vizcaya (Basque), and Valencia.
This may turn out to be a temporary fad, but it could also turn
out to be the beginnings of the breakup of the state into
smaller independent regions. The most obviously viable of these
proto-countries is Catalunya. It is the wealthiest, the most
organised, and has the longest and strongest pedigree. Itís
parliament goes back to the tenth century, well before there was
such an entity as Spain. And you can take it the guys who live
there are acutely aware of this.
In short, there are no obvious guides as to where things are
headed in the eurozone. Up, down, sideways, and god knows where.
Iím remaining on the sidelines. Putting my money where my mouth
is means renting in Southern Europe for me. I have put more
money in my pocket by selling up, and living in rented
accommodation. I pay Ä400 a month all in, and that includes wifi
(but not gas). Owning doesnít come close.
Maybe Iíll spend the rest of the day down by the landing stage.
Too hot to take a boat out, but Iím thinking of preserving the
rest of the lemons. Iím inundated with them. Free holiday for
anyone who fancies sharing the cooking and preserving. Gosh,
life is tough!