Wednesday, 12 December 2007

Spain Experiencing A Sharp Slowdown

Julia Gavin sold more than a house a week as the Spanish real-estate boom peaked last year. Now that business is drying up, she's sharing leads with competitors, reckoning a partial commission is better than none at all.
"We're up to our ears with work, but no sales,'' says Gavin, 52, who works near Madrid. "It's horrible.''

Gavin and her clients are paying the price. In one case last month, she says, she thought she had a sale after three months of negotiations among buyer, seller and mortgage lender. Then Ibercaja SA, a Spanish savings bank, refused her client a loan covering the 168,000-euro ($247,000) purchase price. The bank said it had concluded the client was overpaying for the property in El Escorial, near Madrid.
"The banks are coming up with a million excuses not to give loans,'' Gavin said. "They don't want to take any risks.''

Banks are refusing mortgage because the Client is overpaying for a property: Sounds like Banks are coming back to earth and follow sound pratices. At least this credit crunch created a return to normality over there. Hope the message spreads among reckless lenders throughout Europe.

Source: Bloomberg
Related: Spain as a trigger...Finland Next?

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