The Spanish property market seems to have gone from bad to worse. According to the latest news, more than 900,000 new homes are still unsold this year. This is a very large figure, too worrying to ignore and even Spain’s prime minister Zapatero warned that the nation’s banks will not escape this situation unscathed.

The trouble lies much deeper as previously Spain used to be a popular expat market for many British who had enough of the weather, seeking their fortune in the sun. Little did they know that the tides would turn this badly with many losing their new homes as dubious real estate laws robbed them of everything they had.

But to add injury to insult, due to the weakening British pound and the lack of available finance for loans in the UK, prospective owners of Spanish property simply don’t have the financial means to play the game right now.

Sales of second homes have also plummeted by some 50% since in August last year. Only a mere 17,747 home owners managed to sell their second homes and apartments in the month of August 2008.

The new housing market has experienced a drop of 37% compared to August 2007. This figure coincides with failed bank mortgages in the same month.

Property prices are continuing to fall in Spain which brings the average mortgage to around 137,657 euros. This is good news for investors with enough funds to ride out the slumping economy though. If you ever wanted to pick up a bargain, now is the time to do so.

Maybe the newly proposed Spanish housing plan will help to turn the market around eventually. The new plan (Plan de Vivienda 2009-2012) includes proposals for the construction of more subsidized housing (VPO). The government is keen to help families with low income and those with average incomes with this plan.

The new plan also proposes tighter controls by means of Public Administration to avoid fraud when houses are allocated. A proposal for the creation of proposes a public register has been included in the plan. This would guarantee the allocation of housing based on the principles of equality, and transparency in public control.

Times are tight but on the other hand, with so many thousands of homes unsold, many bargains can probably be struck right now, especially if developers need to sell due to financial pressures to them. It is a sad state of affairs really since one man’s misfortune is another’s fortune.

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