By Andrew Hay

MADRID ( R euters) - On a street corner in Tetuan, a working-class area of Madrid, hand-written “for sale” notices have faded to yellow as owners hold out months for their asking prices, refusing to believe that a nine-year property boom is over.

Having gained 190 pe r c ent since 1998, one of the world’s hottest property markets has finally succumbed to high lending rates, oversupply of a million homes in the past four years and prices that are up to 30 percent overvalued.

Real estate agent Angel Velazquez says some homeowners in Tetuan have cut prices by up to 25 percent to try to attract a buyer, while small property agencies have gone under after months without a sale.

“It’s taking time for people to realize the boom is over, they think they can still make lots of money, but it’s finished,” Velazquez said.

The government’s national figures have not registered a decline, reporting a 5.8 percent increase in prices for the second quarter over a year earlier.

And Prime Minister Jose Luis Rodriguez Zapatero, who faces an election next year, assures Spaniards and foreign holiday home owners the property market will have a soft landing, unlike previous meltdowns in the 1990s and 1980s.

Spain’s economy is robust, with unemployment at a 29-year low, supported by strong euro zone conditions.

But tens of thousands of construction workers could lose jobs as residential construction slows. That could cut Spanish growth by a percentage point in 2008 and end Spain’s long outperformance of euro zone peers, economists warn.

“If we’re lucky, we’re entering a period of house price stagnation around the level of inflation, which will include price falls,” said Fernando Encinar, a director of Idealista.com, Spain’s biggest online property advertising site.

Price declines could be sharper, and drag on longer, if firms continue to flood the market with new homes. Stock market investors remain jittery as the global credit crunch puts extra pressure on over-leveraged Spanish real estate firms.

“There is potential for panic,” says economist Susanna Garcia at Deutsche Bank in London.

SPANISH SPRAWL

Nearly a third of all concrete and asphalt covering Spain was laid in the last 14 years, as the former European economic backwater built homes and infrastructure and took per capita income to a level now close to the EU average.

Ranks of identical ochre and beige brick apartment blocks have marched out over plains and farmland around cities like Madrid and Valencia.

A symbol of the boom is Sanchinarro, a higher-end neighborhood on the sprawling northern edge of the capital.

(PRWEB) September 24, 2008 — TheMoveChannel.com, the leading international property portal, announces a number of new Costa del Sol property developments or properties for sale, including:

- Aged 55 + development (Secure environment, 2 beds, 2 baths, full sports facilities, £218,940)
- 3 bedroom Penthouse (Exclusive development, 86 apartments in the development, £1,990,360)

Properties in Spain may not be an investment opportunity UK investors have considered of late due to the credit crunch. One of the most visited areas in Europe; the Costa del Sol is famous for its sun, fun and fabulous beaches. We take a look at a few of them to see what all the fuss is about.

How To Travel

The three airports that service the Costa del Sol are Seville, Gibraltar and the main airport, Málaga; all have regular cheap flights from London and other popular European cities.

Málaga is the busiest and most central of the airports and is situated between Málaga City and the large resort of Torremolinos on the national road N340, which connects all towns and resorts along the coast. Trains can be caught from the airport into Málaga City and to Fuengirola and bus services link the coastal towns as well as the inland towns of Ronda and Granada.

Nikki Beach (Marbella) is an exclusive beach used by the rich and famous, as well as the wannabe crowd. But don’t be put off, as this beach is lovely, blessed with exotic bamboo beds, alcoves of tee-pees and gently swaying palms.

As the sun begins to set things take a slightly different turn as the music starts to increase in volume and the party on the beach really starts to get underway.

Here’s a conversation with an English Spanish lawyer on property dealingsLawyer discusses property in Spain in spain

Des Sparkes answers various topical issues and has to be worth a listen.
How much did your last visit to a lawyer cost?

Here are some of the issues:
How can I stop my property being grabbed back by the authorities?
How can I know for sure I am dealing with a fully qualified lawyer?
How do I avoid all the sales pressure and take time to make my decision?
Are there things I should watch out for when I go on an inspection trip?

Des recently took part in a BBC program so we thought you’d like the benefit of
some of his knowledge.
Des is available at www.sparkeslawyers.com

Tags: lawyer, property, spanish

High interest rates have hit the property and construction sectors in Spain [GALLO/GETTY]  As unemployment rates soar and the property and construction sectors decline, Al Jazeera reports on the Spanish government’s new $15bn stimulus scheme.     As the first US-style fiscal package to be adopted by a European government, the plan is a clear indication of how worried Spain is about its economy.   The downturn comes after years of economic boom, particularly in the property and construction sectors, which have proved vulnerable in the current global credit crisis.   María Dolores Alfonso, an economics professor at Seville University, said that Spaniards are now facing up to the crisis.   “From not even figuring in people’s conversations a few months ago, it’s now the star topic that you hear everywhere,” she said.   “We are definitely in a crisis, you see it, you feel it, you breathe it.”   Job losses   The property and construction sectors have been hit the hardest by high interest rates, Alfonso said.   Spain’s construction boom was financed by borrowing from the banks.   The credit crunch has forced the country’s biggest property companies into renegotiating billions of dollars worth of debts.   Carlos Paneque, an architect from Seville,  has had to lay off several employees Carlos Paneque, an architect from Seville, recently had to lay off several employees.   “What might make this crisis worse now is that we were in such a boom period when the recession hit, but construction always has cyclical periods of growth then loss, it will recuperate,” he told Al Jazeera.   Meanwhile, tens of thousands of property agents have also been shut down.   And many of the thousands of building sites across Spain and along the Spanish coast now lay dormant, with no indication of when they might start up again.   Cheap labour   What has made the crisis all the worse is how the property downturn is being coupled with the loss of much of Spain’s manufacturing industry.   In the southern city of Cadiz, factory bosses are moving operations across the straits of Morocco to take advantage of cheaper labour.   Braulio Martinez works for one of Spain’s biggest unions, UGT, in the bay of Cadiz, and has been dealing with the fallout of the closure of the Delphi factory, which made car parts for its US owners.   He said: “The news was a massive blow with no explanation, and we were left asking ourselves about where our dignity was after giving so much of our lives to this factory.”   Martinez and the former Delphi workers have been working with the government to implement a plan to attract potential investors in the bay.   Some companies have taken the bait but they are yet to move in.   It looks like by the time they do, many of Martinez’s members will have been unemployed for years.   They already say their children are leaving the area and are more hopeful of finding work elsewhere.

Tags: spanish, property