Spain - Desperate times, desperate measures ?
A section of the Spanish property market is being given a government backed helping hand as the Junta of Andalucia announced a huge subsidy to get the market in the area moving.
Property prices in Spain don’t necessarily reflect their true value, & banks attempting to minimise their loss on reclaimed property, together with reluctant private owners, are deemed to be holding prices artificially high.
This move in Andalucia will see 1 billion euros of tax-payers money used to back developers in offering un-sold new homes at cost price to purchasers. Banks will then offer 100% mortgages for the first 3 years, then in the fourth year the Junta will offer loans that can be used to subsidise mortgage payments. The restriction is that the loan will be for no more than 15,000 euros & for no longer than 5 years.
The bad news is for anyone selling a property in Spain, especially in Andalucia, is they are likely to see a realistic adjustment of price and value in their property. The good news is that the market may become even more attractive for new investors.