Few of us would think of walking into a bank rather than an estate agent when looking for a new home. Not doing so could be a mistake. Spain’s banks, including savings banks known as cajas, have more properties on their books than do the estate agents and are looking for buyers.

Who’s counting? The banks themselves are not sure as their portfolios of saleable properties are being added to by the day. This year is likely to see 74,000 repossessions as hard-pressed borrowers hand in their keys.

One expert told El Mundo; “The banks’ stock of repossessions is growing fast and is expected to keep on doing so.” It seems harsh to label the banks as foolish in their past lending criteria for it takes two to tango. Builders and buyers alike overstretched themselves and did their bidding with crossed fingers.


The glut in unsold homes is the collateral damage caused by economic implosion. The banks are simply left holding the baby; their dilemma now is what to do with the unsold stock?

This has been divided into two categories: A and B. Into the first category falls the swathes of recently or almost completed good quality urbanisations, many of which are standing empty with no buyer in sight, perhaps for years ahead.

Reckoned to make up 70 per cent of banks’ unwanted stock these properties are going for a song. Many are sold on as investments rather than homes. Recently formed in-house property divisions have been created by banks to clear stock through a series of discounted and preferential terms.


The category B portfolio is not insignificant either for this is made up of the bulk of the 74,000 repossessions likely to take place in 2009 alone. Add to these unwanted hostages the €9 billion of bad debts owed by former mortgage holders and the banks are left with a massive headache. This is made more problematic by this category’s variable values and locations. It is hopelessly fragmented.

Spanish banking giant Banco Santander is selling many of its properties to employees, not to mention other consortiums and groups such as Telefonica. These offer considerable discounts and incentives to staff; often with 100 per cent mortgages taken out over 40 years. Others are setting up what can best be described as their own estate agencies.


Michael McLaughlin of Southern Comfit International, says, “It is probably the banks’ most formidable administrative challenge in their history. The rule books are being created and re-written by the day. This fallout from the recession is presenting challenges but opportunities too; for buyers.”

He says: “Despite ten years reputation in sales we are now generating more income from property rentals than from sales. We are urgently looking for registered home owners seeking to attract tenants.”

Some ‘distressed’ properties are being sold at discounts of up to 50 per cent. The difficulty is: 50 per cent of what, when property values are still plummeting? The priority has to be market stabilisation, customer confidence, and a return to measured more sensible lending than in the past.

Boom and bust in the housing market will no longer be an acceptable option for the emerging generations. Banks’ with lending criteria best described as slipshod, will be viewed with suspicion; not the least by their shareholders. Hopefully the current malaise will be looked back upon as unique and most unwelcome phenomena.