Thousands of Spaniards queue in hope of cheap flat
By Sonya Dowsett
MADRID, Nov 15 (Reuters) - Thousands of young Spaniards, many of whom had been queuing for days, signed up for a chance to buy a cheap flat on Saturday taking advantage of a rare housing offer in the middle of the global financial crisis.
A decade-long Spanish property boom collapsed this year, brought down by global credit restrictions combined with chronic over-building and interest rates rising off historic lows. Spain now faces the risk of a prolonged recession.
Developer and self-styled Robin Hood Jose Moreno offered 18 to 35 year olds the chance to buy a flat on the outskirts of Madrid for as little as 120,000 euros ($152,200), paid in instalments of up to 600 euros per month over a 20 year period.
The 2,100 flats have not yet been built, but Moreno hopes to buy sites in the south of Madrid and surrounding areas to start cheap housing projects, similar to other schemes he has started.
In 2007, Moreno sold 402 new-build three and four-bedroom flats to young people in a development in the Madrid suburb of Fuenlabrada for between 82,000 and 88,000 euros.
A line of one man tents, surrounded by groups of prospective homeowners, started to appear outside a neighbours' association building in the Madrid suburb of Fuenlabrada last Sunday.
By Saturday, the line was hundreds of tents long, snaking down a pedestrian pathway into parkland beyond. The Fuenlabrada municipal council distanced itself from the scheme, saying such initiatives created false hopes and confusion.
Young people taking turns to wait said they were still unable to afford housing, despite a sharp slump in Spain's property market. The offer was a good deal, they said.
"The salaries that young people have here ... you either have an important job or you cannot finance an apartment on your own, you can't become independent," said Jose Gonzalez, a 23-year old student who had been waiting since Sunday.
Moreno, known as "The Well Digger", was greeted like a popular hero by groups of waiting young people as he walked down the line of tents, sporting a fisherman's cap.
He can make a profit out of the scheme while helping young people who cannot otherwise afford housing, he said.
"The salaries they draw are in no way related to the cost of housing," he told Reuters. "For a young person who earns 1,000 euros a month to pay 1,500 to 2,000 euros -- it's impossible."
After a decade of climbing house prices and stagnant wages it is hard for young Spaniards to fly the nest.
House prices are only just beginning to fall, despite more than doubling in the six years to 2007, whereas average salaries have barely risen above inflation.
Government data showed house prices fell 1.3 percent in the third quarter, the second quarter running they fell on a quarterly basis, but private sector estimates have reported much steeper declines as boom turns to bust.
