Swine flu shakes Spanish property bargain hunters
It must be tough to be a Spanish homeseller right now.
Just as investors pluck up the courage to once again dip a toe in the Mediterranean housing market, along comes a killer flu pandemic that keeps bargain-hunting foreigners thousands of miles from a purchase.
Earlier this week, Palma Property Auctions – one of Spain’s biggest holiday home auctioneers – said rising swine flu fears among clients had forced it to shelve its eagerly-awaited summer sale.
“We had nine concrete cases of people who called us to say they wanted to have a look at a property and possibly take part in the auction, but they were not going to because of swine flu,” Daniel Westerlund, a spokesman for Palma Property Auctions, told Reuters.
“A lot of our prospective buyers are German, and in Germany there’s a huge amount of media attention directed at this. Those are nine concrete cases, how many more there are on top of that, I cannot say,” he said.
Westerlund said fear of possible exposure to the virus during the plane ride to Spain was the chief cause of investor nerves. He was less convinced Spain’s worsening economic climate had fatally dented interest.
He said his auction house was thriving despite the well-documented Spanish housing market collapse because buyers and sellers wanted fast and efficient ways to transact non-distressed real estate.
“The vendors were obviously hugely disappointed, as we were, because we were looking forward to a successful auction. We were expecting sales volumes of between 3 and 5 million euros,” he said.
But swine flu or no swine flu, Spain’s once-booming housing market is on its knees and grim economic portents suggest a sustained recovery might be months, even years away.
The number of houses sold in Spain fell 32.2 percent in May to 34,012 units compared with a year earlier, marking the 17th consecutive month of decline, data released by the National Statistics Institute earlier this month showed.
While swine flu may have forced Westerlund’s buyers to flee, the underlying problem in the market is a lack of investor confidence. One might argue that the similarly potent bird flu failed to affect investment turnover at the peak of Mediterranean property boom, even though the migration paths of some infected species stretch right across the region.
The vast majority of foreign buyers are more concerned about making the right investment call at the right time than catching a bout of swine flu.
Until they want that luxury Spanish bolthole more than the security of a tidy bank balance, Spain’s real estate depression looks set to linger on.