I TOLD YOU SO
A BLOG
By
Nick Snelling
I TOLD YOU SO
I am curious as to how many fellow Britons in Spain have felt a strong sense of ‘predictable inevitability’ as Spain slides inexorably into recession?
I have been writing about the probablity of a recession for the last couple of years and yet I have been treated as a complete fool by my Spanish friends when I have warned them of the impending crisis. Indeed, they have looked at me incredulously – expecting the boom of the past ten years to continue forever more.
I know that the ‘credit crunch’ and the rising price of consumables has impacted negatively upon Spain, as it has everywhere else in Europe and America. However, a recession was going to occur irrespective of these vicious economic ‘exocets’.
Just like the late 1980’s in the UK, you simply cannot have a sustainable situation when property prices are massively outpacing salaries. And in Spain, as we all know, the purchasing power of the Spanish salary has hardly changed since 1997. Spanish property prices, however, have risen enormously. Indeed, I know of flats in my area that have increased in value by around 1,000% in the past six years. Certainly, up until a couple of years ago, Spanish property growth was around 20% per year – not reflecting Spanish earning power in any way at all.
And, to make matters much worse, the Spanish have ‘suckered’ themselves into thinking that North Europeans will keep flocking to Spain to buy just about any rubbish that exists - irrespective of its legality or suitability for retiring North Europeans. In this regard, I gasp at the Spanish belief that North Europeans (the driving force behind the property boom) will come to Spain to buy ill-designed adosados or, for that matter, flats. Some will, of course, but what most Europeans want is an affordable, well built, character villa with 3 bedrooms, 2 bathrooms, a pool, and a decent flat plot close to the coast – preferably fully legal and without nebulous, and previously unknown, urbanisation costs. Needless to say, very few properties in Spain meet this criteria.
In fact, for years the authorities in Spain have allowed rampant, often illegal and poorly designed construction to take place across the country. There has clearly been no strategy at any level – whether regarding design precepts or the future social impact of new developments. Furthermore, (amazingly!) absolutely no regard whatsoever has been paid to the appalling (often justified) publicity in Northern Europe about ‘Land Grab’ and other associated property problems. These concerns have produced a perception of real concern amongst potential buyers.
In short, Spain has carelessly and greedily squeezed the goose so hard for endless golden eggs that the poor old bird has, very predictably, keeled over. Unfortunately, the consequences are likely to be as hard as they were for the UK in the early 1990’s... Copyright Nick Snelling (www.nicholassnelling.com) author of three books on Spain including ‘How to Move Safely to Spain’ (www.movesafelytospain.com)
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