31 Dec 2008

You Thought You Had It Bad?

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José Guardia, quoting the Economist on Spain’s housing bust, demonstrates that some countries have it a lot worse.

The market is dropping fast. Property fairs tout discounts of as much as 60% on new-built homes, or even “buy one, get one free” offers. …

Loan-to-value ratios tend to be safely below 80%. And Spanish mortgages cannot be cancelled by dropping the house keys at the bank: security is provided by all of a borrower’s assets—and sometimes those of relatives as well. It is no surprise that most Spaniards do their utmost not to default.

Ouch! I’m not inclined to think myself that two-for-one deals will really get many houses sold. “Shall we sleep in 514 West Queen Isabella Boulevard or in 516 tonight, Dear?”

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