Foros de la Plataforma por una Vivienda Digna

[nene]

Ghost towns have started cropping up in Spain as a decade-long housing boom ends.

MADRID -- Javier Usua and Ruth Graneda never got out of the car when they visited Sanchinarro and Las Tablas, two of Madrid's biggest new suburban developments. The concrete-block buildings and empty streets were all they needed to see.

''We came to look at apartments but found ghost towns,'' said Usua, a 27-year-old taxi driver. ``You'd need to drive miles for a loaf of bread or cigarettes and my girlfriend found it creepy and unsafe so we turned around and left.''

The abandoned developments are evidence of a housing glut that will lead to Spain's first decline in home prices since at least 1992, when the Housing Ministry started keeping records. Spain constructed 750,000 houses and apartments last year, more than France and Germany combined, while annual demand runs about 60 percent of that, according to the Finance Ministry.

`OVERSUPPLY'

''The real killer of the housing market is the immense oversupply,'' said Gonzalo Bernardos, a professor of economics at the University of Barcelona. ``Prices are already unofficially falling.''

New and existing house prices will drop by 20 percent from now through 2009, Bernardos estimates. The country built an average of 432,411 houses per year from 1996 to 2005, more than France and the U.K. combined.

Spanish home prices have more than doubled since 1998, exceeding growth rates in the U.K. and Ireland, two of Europe's fastest-growing markets. The increase has been driven by a drop in interest rates to less than 3 percent from about 15 percent as Spain adopted the euro, household incomes swelled as women joined the workforce, and vacation-home purchases by Northern Europeans surged.

A SIMILAR SLUMP

As prices start to decline, Spanish homeowners may face the same challenges as buyers in the U.S., which is in the second year of a housing slump. Falling prices may spur higher delinquencies as buyers face difficulty refinancing. Spanish buyers may face an even higher risk of losing their property because housing prices are based on appraisals rather than actual sales, and appraisers often inflate values.

''We live in a country where everybody understands that appraisals are poetry,'' said Jesus Encinar, chief executive officer and founder of Idealista.com, a property website that tracks existing home prices in Madrid, Barcelona and Valencia. 'Bankers have said to me, `Why do you care if the appraisal is fake? It will be true in the future.' ''

Banks loaned 250 billion euros to developers last year, eight times more than in 1998, and 134.3 billion euros to construction companies, data compiled by the Bank of Spain show.

BANKS WIN

They loaned 544 billion euros to homebuyers, four times the value of mortgages in 1998. Bilbao Bizkaia offers loans up to 100 percent of the appraised value. That means even a modest decline in home values, combined with rising interest rates, may result in higher foreclosures.

''The problem here is that people have this unshakeable conviction that prices simply cannot fall,'' Encinar said.

The amount of Spanish families' wealth tied up in property in 2004 amounted to 4.3 trillion euros, or 510 percent of gross domestic product, according to the Bank of Spain. U.S. households held $17.2 trillion of real estate, or 159 percent of GDP, in the same period, according to the Federal Reserve.

Defaults on Spanish home loans in the first quarter were the highest in at least four years, according to Standard & Poor's.

Olgar Del Corral, a 32-year-old plastic surgeon from Madrid, said she bought a second home because house prices ``always rise.''

''It's clear that investing in a property is a much safer bet than putting money into the stock market for example where you never know what is going to happen,'' she said.

In Sanchinarro and Las Tablas, Esperanza Aguirre, president of the regional government of Madrid, opened the first light railway stop last month. No passengers descended from or boarded the bright red-and-blue train this week when it stopped at the station during lunch time. Spaniards traditionally go home for lunch.

''Not even God lives here,'' Usua said.

http://www.miamiherald.com/127/story/131193.html

[Qwarto]

Bank wins...

I guess that's kind of funny.