Whats happening with the repossessed properties held by the banks?
There are some signs that the Spanish banks are now starting to address the mountain of stock they have accumulated although don’t get too excited as it looks like they won’t be in too much of a rush to shift it preferring instead to drip feed it back onto the market. One of the ways they are addressing this is by offering drastically improved mortgage terms but only on their own repossessed properties. It seems that they are keen to improve their finance terms rather than reduce property prices too much. This has led to quite serious accusations that the Spanish banks are keeping property prices in Spain artificially high. José Luis Campos Echevarría recently commented in Spanish newspaper El Mundo: “With the majority of the big developers drowning in debt, the banks are now the ones determining the rhythm of prices. The main answer is that the banks are selling their own stock by improving their financing terms rather than dropping prices” “This strategy will cost them in the medium
