June 4 Tuesday
Sunny, bit of light cloud, breezy 25 max. Batteries ran out when dancing, which is frequent, but forgot to take recharged replacements, which is less frequent. So didn’t dance as much as I would normally do. Went to super to do a bit of shopping and decided to buy replacements, but with fresh foods didn’t want to go back to dancing as the veggies suffer in the heat.
Beach and shop not busy. Bought a paper. Surprised to read that lending by banks in spain has fallen over last 5 years by 70%. Lending in May to consumers was down 7% on last May, and lending for new mortages was down 23% in that same period.
This makes me think about property prices here. My guess is that the local market will be more affected than the tourist market – I assume that more of the holiday home buyers use capital or finance in their home country. (Just a guess.)
With average salaries at something like 20,000 a year, average housing should be in range 60,000 to 80,000 (3 TO 4 YEARS income). The most basic flats are in that range, but I feel that they should be below that range. Therefore, I still feel that the cheap market is to come. The nicer newer developed flats are more like 180,000. Of course prices here may not ever be ‘average’, but salaries here are average. Earnings in this region are not above average. (I don’t know about earnings in this town or along the coastal strip, but have no reason to believe them much higher than average.)
Can all these properties be owned by high earners and foreign cash buyers?
Consumer spend is down about 4% since 1 year.
Also read that the banks here have about 35% of their loans classed as ‘doubtful’ and another 15% or so ‘substandard’. This is after the bailouts and movement of really aweful debt out of the banks. The crisis is not yet over, it would seem.
The Turkish demos were described as not ‘arab spring’ because the country is a democracy. BUT, some of the politicians responses are very arab spring – with claims that the demonstrators are terrorists and that the secret service is investigating which foreign powers are behind them.