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Empty property after Spain's burst bubble

Monday, October 01, 2012 - 01:58

Oct. 1 - Ruthless building contractors, banks offering attractive loans and locals blinded by a property boom. Thousands of properties stand empty since Spain's property bubble burst, and it left a bitter taste in the Murcia region. Joana Partridge reports.

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An idyllic Spanish resort. Complete with swimming pool, golf course and a favourable climate. You'd think property seller Paul Williams would make sales easily. SOUNDBITE: Paul Williams, Managing Director of Villa Cashback / Polaris World, saying (English): "I think the weather helps sell it more than anything. You know, probably that's what people buy for, it's the 300 days of sunshine a year that Murcia has." But nothing's been easy at Mar Menor resort or anywhere else on Spain's Mediterranean coast since the country's property bubble burst in 2007. Spain's banks lent heavily to real-estate developers during the decade-long boom. When that ended, creditors were left with bad loans to housebuilders and unfinished apartment complexes. Many of the properties still stand empty. Around 10 percent of 10,000 properties built in Polaris resort are for sale, after the banks repossessed them from the developers. UPSOUND Some see the chance to snap up a bargain - but getting a mortgage from Spain's struggling banks remains a problem. SOUNDBITE: Paul Williams, Managing Director of Villa Cashback / Polaris World, saying (English): "In most cases it's the banks that have that problem and they have the tools to help put it right by lending to people." Local governments have been accused of using funds from troubled lenders to bankroll huge construction projects. Fernando Vera, a member of the opposition socialist party, says the boom created other problems, like unemployment. SOUNDBITE: Fernando Vera, Spokesman for Socialist PSOE party, saying (Spanish): "There were 3 or 4 boom years and it will take decades to solve the problems left behind." Murcia and four other regions have now asked for state aid. With Spain expected to seek a full bailout in the next few weeks, understanding what went wrong could be the key to putting it right. Joanna Partridge, Reuters

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Empty property after Spain's burst bubble

Monday, October 01, 2012 - 01:58