Are you looking to buy cheap bank repossessed properties in Spain? Then you are in luck as there’s been a rule change by the Spanish government which could cause more Spanish banks to sell repossessed properties obtained during the recent recession at much lower prices.
The Bank of Spain has introduced a new law that will compel banks to reduce their exposure to the Spanish property market. To understand why this is such an important decision, let’s have a quick look at the history behind this.
The period between 2008 and 2012 were particularly harsh years in Spain. That was when the recession was at its harshest. A number of mortgage holders were forced to give up their homes to banks because of failure to pay back loans. Banks became the biggest property owners in Spain. Suddenly, cheap bank repossessed properties for sale in Spain flooded the market.
A number of banks purchased unfinished and incomplete properties at bargain prices from developers who were at the brink of bankruptcy. Banks were heavily involved in the real estate game.
As banks sought to offload the properties in their possession, this lead to a fall in property prices across the country. Since then, property prices have recovered somewhat, as banks began offloading their assets at the prevailing market prices.
Now though, the Bank of Spain wants all banking and financial institutions in Spain to distance themselves from the property market. They want banks to remain independent of the real estate industry. That’s why they have brought in a new rule asking for all banks to distance themselves from the real estate market, so that the banking sector can become independent of the industry.
This, according to many property experts, could lead to a slew of low-price offers on the market as banks rush to sell off the remaining properties in their possession.
As Mark Stucklin of Spanish Property Insight explains, “If the banks are forced to increase their write-offs that gives them more room to lower prices. The troubled real estate exposure of Spanish banks has risen every year since the crisis started, despite huge write-offs each year, rising to a total of €84 billion at the end of 2015.”
This is certainly good news for property buyers. Property prices in Spain have largely stabilised. The high numbers of low priced bank repossessed properties for sale that are expected to hit the market are expected to deliver a real boost to the industry. For home seekers, there are going to be a plenty of wonderful bargain properties up for grabs.
This is certainly good news for you if you want to buy a home in Spain shortly. While it is true that Brexit has somewhat dampened sentiments among British buyers looking to buy a holiday home in Spain, fact is there is still a lot of demand for Spanish properties. We expect property prices in Spain to remain on the right track and there are many great opportunities to be had.