06 Oct 2008 2:00 PM:
Hi Everyone
There are extraordinary events happening in the financial markets all over the world. We all know that the mortgage market has dried up due to credit crunch and a freeze in Banking activities. They themselves are not borrowing among them and the Govt. is trying to pump in money to make the wheels move. I do not see any quick turn around in the mortgage market within two months to see any substantial benefits for borrowers.The developer had already hiked up the price way back in 2005 when it was booming and so he is sitting comfortably on a shortfall cushion and not worried about a fall in property price. I suppose the Spanish economy is already in a recesssion with falling property prices, air fares going up, and tourism drying up; not only in one country but throughout Europe, jobs will be next to go. Some might say that the tourists will get a bargain holiday with falling rentals but at whose cost? If one is investing for a buy to let, than he is offering a cheap holiday rental to a tourist at his own cost.
It is my "guess" that 70% of people will be taking the mortgage route. With the current situation in the mortgage market in mind, if 20% are successful than it leaves 50% of people without a mortgage. Does anyone have a clue how the developer is going to react to this extraordinary situation? For people who are moving there permanently not only they will have to fork out the full 100% of their savings(if they fail to acquire a mortgage) but also risk facing unemployment for a long time. I understand that it is nearly impossible to get your full money back from a developer in Spain, but isn't this an extra ordinary situation that needs an extraprdinary solution for people who might be trapped in this situation for no fault of their own? Would not the Spanish Legal system judge their dicision in light of these extraordinary events?
Jani
Community thread:
Thought for the day.
--------------------------------------