Terrible Land Grab Laws
For a long time now, the terrible land grab laws in Spain have caused heart-ache and pain amongst the ex-patriot community. It seems the actions of the bastard land-grabbing property developers have finally killed the goose that laid Spain's golden egg.
Investing pensioners have been turned off from the sun and life-style of Spain because of the terrible uncertainty that land grab shit-heads have imposed. Their grasping fingers have finally throttled the flood of oportunity that came from the aging settlers.
Who wants to put life-savings at risk, when corrupt laws allow Spanish developers to grab land and make the land-owners pay for the priviledge of having property stolen.
House Prices Fall
Spain's government said Tuesday that housing prices continued to fall in the third quarter, a further concern for the country's embattled banks at a time when investors are growing increasingly worried about the health of the euro zone's financial sector.
Spain's housing price index in the July to September period fell 5.5% from a year earlier—the fastest pace of decline since 2009—and was down 1.3% from the second quarter, the Public Works ministry said.
Prices peaked in the first quarter of 2008, bringing the country's decade-long housing boom to an abrupt end and pushing the economy into its worst crisis since the 1970s.
Signs of stress are mounting for Spain's ailing banks ahead of this weekend's much-awaited summit, where European leaders are expected to draw up new measures to shore up the region's financial system.
Last week, Standard & Poor's Ratings Services downgraded Spain's sovereign debt rating and the ratings of 10 Spanish banks, citing the depressed property market as a key reason for the move.
Drop of 18%
The Public Works ministry said housing prices have now dropped 18% during the country's three-year bust, a significant source of strain for the country's financial sector which already holds over €400 billion in loans to the construction and real-estate sector—equivalent to 40% of Spain's gross domestic product—backed by collateral that loses value as property prices slide.
Falling prices are also a problem because banks have amassed significant property portfolios, largely from bankrupt developers or foreclosed homes, and because they deter borrowers from seeking new mortgages, a key source of income for the banks.
The €300 billion owed by real estate developers alone is particularly troubling, says Luis Garicano, a professor of economics and strategy at the London School of Economics.
"There's just no chance that these loans will ever be paid back," Mr. Garicano says.
Unlike U.S. banks, Spanish banks haven't been hit by a surge in retail mortgage delinquencies, which remain low in the country because under Spanish law borrowers have to pay mortgages in full even if the property is foreclosed, a measure that removes the incentive to simply walk away from them.
In Spain, loans to developers have become the top concern after the country went on a building frenzy in the years prior to 2008.
Land Grab Laws
The building frenzy stopped once ex-patriiots realised that property could be stolen from them using corrupt land grab laws. The legal system - the very institution that should protect the individual from grasping developers - has let down helpless citizens. The law is dishonest. Even the EEC deemed it unethical. Spain is paying the price for it's greed and corrupt actions.
It is this law that has caused Spain to suffer. Spanish land grab laws have finally killed the golden goose. Spain will never regain it's popularity unless it very publicly changes it's laws towards land ownership and re-instates those poor individuals who have been ruined.
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