Banks may cut repossessed Spanish property prices
Currencies Direct September 27th 2016 - < 1 minute read
Spanish banks may be forced to cut the price of homes they have repossessed to attract buyers.
It comes as the Bank of Spain has announced plans to increase provisions against their repossessed property portfolios.
Banks in Spain currently own hundreds of thousands of properties, acquired during the housing market crash of 2008. Most of these were taken from struggling developers who were facing bankruptcy.
Reducing the number of properties on Spanish banks’ books will only be possible by lowering the price to gain investors’ interest, according to Mark Stücklin, of Spanish Property Insight.
Cinco Días, the Spanish financial newspaper, said that some banks will lose a significant amount of money due to these plans.
Mr Stücklin said: “The troubled real estate exposure of Spanish banks has risen every year since the crisis started, despite huge write-offs each year, rising to a total of of €84 billion (£72.7 billion) at the end of 2015.”