The country will not recover from the property crisis in 2011 and certainly not until 2012 or 2013 at the earliest. Moreover, some pessimists like the IMF, forecast a long period of crisis up to 8 more years.
The latest data does not give room for hope. The mortgage market is getting tighter and tighter in Spain. The rate has dropped in 4 consecutive months since May 2010 compared with the same period in 2009. The fall in May was -2.9%, in June, -10.8%, in July -6.8% and August -3.4%.
Repossessions are becoming a major problem. The direct effect of repossessions is that it enlarges Banks portfolios even more putting extra pressure on the market. During the 2010/1Q repossessions reached a new peak from 2007: 27,561. Banks now have a repossessed property asset portfolio worth 20.5 billion euros.
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