Friday, 11 May 2012

Property Bank Repossessions in Spain

It appears that there are further doubts about the BFA accounts in Bankia


With the Spanish stock market falling 20.4% so far this year, Bankia sees shares in its assets column worth some 66% less than in the official accounts. The problem of the ‘toxic’ assets in construction, property, home loans and credits to families and promoters is well commented, but new Chairman, José Ignacio Goirigolzarri, will now also have to manage the shares in other companies the bank owns. 

Their value is substantially less than reflected in the bank’s accounts and El País reports an audit has put the size of the new black hole at 2.465 billion. Deloitte says that the BFA has put down as fiscal assets the losses suffered, which means that taxes the forecast saving in the future are in the accounts now as real assets. This known as tax credits.

The Spanish Government will impose that some 32 billion € must be put aside in the banks to cover real estate investments. 
It remains to be seen whether today’s reforms of the financial sector are considered credible by investors, and whether they finally free up the flow of credit.

But with this further Government pressure it seems banks will have to release their stock for liquid assets and become more receptive to offers on the prices advertised for their property repossessions. The Spanish Government, Developers and Banks are drawing a common strategy in an attempt to promote Spanish property market abroad, with the UK and German home buyers in the spotlight. Also to encourage buyers investing in property, the Spanish Government says it wants to give more security to foreign property buyers.

The pound is at a near three-and-a-half year high against the euro, trading for around 1.20 euros, its strongest rate against the currency since the financial crisis hit in 2008.

The property bargains are being offered to market at heavily discounted prices and a window of opportunity has opened up for buyers who want the best property at a reasonable price. Local price cuts in Spain have returned them to good value holiday destination status. Prices have fallen dramatically in Spain over the last 24 months, making the country one of the cheapest for typical holiday spending items in a 36-nation list.

Taking all these factors into consideration now could be an ideal time for an investor to purchase a property in Spain. Visit the Property Overseas Group website for a selection of property repossessions in Spain