Spanish banks rob market recovery

Potential market investors are now reporting that property prices in Spain are artificially high compared to the true market state, and that it's the banks that are holding prices up.

According to figures from RR de Acuna & Associates, based in Madrid, Spanish banks acquired approximately 110,000 homes as the boom collapsed, sometimes in exchange for writing off major debt of property developers. The problem these lenders have now is that selling the property at true market value will incur a loss, and so a market strategy is required.

Some banks are now offering 100% mortgages and new car incentives to attract new buyers, but there is little evidence to show this approach is working.

Investors are now far more market wary and many still fear the likelihood of a market adjustment whilst the banks are hindering the proper recovery of the real estate market.

Anyone selling a property in Spain can perhaps benefit here as most buyers looking for a property in Spain are far more likely to be attracted to realistically priced properties.