For Sale signs drape the exterior of units in Madrid (pictured), Barcelona and coastal towns like Malaga.
With rumors of an international bailout swirling, union protests over proposed pension reform and unemployment now officially over 20%, 20.33% to be exact, Spain’s misery is poised to worsen this year. And that’s great news for Argentines looking to purchase real estate in Barcelona, Madrid and Majorca.
Spain’s housing collapse began in 2008 and prices have fallen sharply in the major metros and coastal regions like Malaga, Almeria, Valencia, Ibiza and Alicante. Now analysts are projecting a further slide in 2011.
Fitch Ratings estimates Spanish real estate prices will fall another 10% this year which makes Spain and Ireland the two weakest markets in Europe. iProfesional’s Patricio Eleisegui lists the variables contributing to the olfato criollo: “Excess inventory, a growing number of bank-owned properties coming to market, rising unemployment, unpopular austerity measures recently enacted by the Spanish government and projections for a weak economic recovery this year.” Adding fuel to the fire is the national debate that has erupted over whether giving up one’s residence is sufficient to settle one’s debt obligation: predictably defaulting homeowners say “Yes” and the banks say “No.”
While that debate wages on, Argentines are snatching up three-room apartments in Madrid for US$120,000, in Barcelona for US$150,000, and condos on the beaches of Malaga for as little as US$100,000. After Argentines, Eleisegui says Americans and British investors are the most active buyers in Spain today. Analysts say the fact Spanish property prices have fallen to the level of Puerto Madero would have been inconceivable just three or four years ago. And while SIMA, Spain’s annual real estate expo, was a total bust last year, maybe the key to success for the 2011 edition would be re-branding and tweaking the acronym to reflect the status quo: Spain Is Muy Asequible. (Full Story in Spanish)
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