Dear Overseas Property Mall,
I am a little confused about the state of the Spanish property market. I read conflicting reports and projections about Spain all the time and the newspapers are filled with doom and gloom alongside glowing projections. Should I invest in Spain or not ?
Confused in Coventry
Dear confused in Coventry,
Your confusion is understandable. Several small and medium sized Spanish property developers have recently run into financial difficulties, some of the smaller ones taking deposits from customers with them.
The most recent casualty, Colonial, saw it’s shares plummet 40% in 2 days, seemingly for no reason other than worries that the Spanish property boom is over. The president and largest shareholder, Luis Portillo quit after this drop.
This follows on from two other medium sized casualties. Astroc saw their shares drop 85% in July last year causing the founder, Enrique Banuelos to quit and Llanera, a developer based in Valencia, filed for credit protection a few months later.
The Financial Times has a more in-depth look at these casualties here.