Spanish Banks Hold onto the Best Properties until the Uplift

Added: (Sept 2009)

Although Spanish banks are now the country's biggest estate agent they are as yet unwilling to offer the better properties from their vast property portfolios to their customers and members of the public via their property websites. The majority of properties that are on offer from the banks at present are older apartments in peripheral areas, generally in run of the mill condition and in some cases they are even offering properties in buildings that have been built with sub standard concrete, a phenomenon called “aluminosis” which was not uncommon in Spain in the 60s and 70s. These properties are buyable once the building structure has been reinforced and they have received a “habitability certificate” from the local Town Hall. If not they are in danger of collapsing at some stage if not reinforced.

Properties in the better areas are noteworthy for their absence from the banks' property websites. It would seem that the banks have taken a decision to hold these properties back in the hope that they will be able to get a greater return on them when the market turns as opposed to selling them at hefty discounts now.

Banks have received entire developments from developers unable to meet their debt repayments and a considerable number of these have been mothballed. One such example in Valencia city is a building that was constructed by a company called FBEX in the Nou Campanar area of the city. Here you can see the promotional video for the development that was launched in 2006 amid much fanfare :

http://www.youtube.com/watch?v=fgVlScD_doQ

While the development was built with a first class finish, the promoter was to say the least “enthusiastic” when it came to pricing the properties. Off the plans the promoter was looking for €6,000 per sqm when similar developments were achieving €3,600 per sqm in the Nou Campanar area. Before the property peak in Valencia , the price per sqm was hovering just under €3 K on average in the city and is now at €2,618 with the Nou Campanar area at €2,993.

Banesto which is a subsidiary of Banco Santander has taken possession of the development and for the moment is not taking any offers on the properties there. While banks are offering discounts of up to 40% on low end distressed property they are unwilling to discount the upper end ones. Banesto has top end luxury attic apartments in Valencia city in Plaza Tetuan which are remaining at the initial offer price of €1.5 million.

The Director General of the Spanish property website “Pisos.Com”, Mr. Miguel Angel Alemany has stated that his company was offered a portfolio of 1,000 properties from one of the bigger Spanish banks to offer on his site however the same back has a property portfolio of no less than 5,000 properties so in essence held back 80% of its total number of properties.

Banks are not the only Spanish property players that are working to their own agenda as developers themselves are also discounting the properties that are more difficult to sell in the present climate but remaining firm re asking prices for prime properties. Metrovacesa is one such example in Valencia city with the prices on a development it has around the “City of the Sciences” remaining firm while properties in a beach development in Almenara, Castellon have been discounted by €65 K.

All the more reason therefore to use the services of Valencia Property Hound when sourcing property in Valencia to really appreciate when one is getting value for money. Poor property is poor property regardless of how cheap it is and will be difficult to make a reasonable return on especially if it is in a marginal area.

Therefore whether it is “Valencia City Property” or “Valencia F1 Property” that you need : Valencia's Premier Property Search and Property Investment Company, “Valencia Property Hound” should be your first port of call.

Article by Dermot Quinn, Valencia Property Hound Ltd