♠ Posted by Emmanuel in Credit Crisis,Europe
at 8/12/2013 03:25:00 AM
Even when there's no one sittin' there
But a chair is not a house
And a house is not a home
When there's no one there to hold you tight
And no one there you can kiss goodnight...
As the late Luther Vandross explained, a house is not a home. Unoccupied houses--whether deserted or incompletely finished--blight the developed world. In the benighted American wasteland of Detroit, they have been bulldozing more and more unoccupied homes, and this phenomenon now stretches to parts of Japan. Meanwhile, we have a related occurrence in Spain. Alike the US, Spain experienced a housing boom in mid- to late-2000s, fuelled by expectations of ever-rising prices and easy credit (especially from German banks plunking their euros in these "investments"). Years and years of stagnation have left Spain with--you guessed it--thousands ofnd thousands of unoccupied houses.
How do you correct this oversupply of partially built, unoccupied houses that will probably never be completed that are dragging down market prices? It's the same solution the world over, whether in Detroit or Daisen. Namely, demolish those houses:
Sareb, the unit holding soured real estate assets from Spain’s nationalized banks, orders work to stop on about 160 of the 650 partially-completed building projects on its books and decides which ones are worth completing. A small number of them may be demolished, said two people with knowledge of the matter, who asked not to be identified by name because it isn’t public.It's going to be game over in a short while, too. They're just houses, not homes.
“We expect the bad bank will start to seek bids for some demolition projects starting this summer,” said Anka, chairman of Madrid-based Anka Demoliciones and vice-chairman of the Spanish Association of Demolition Businesses.
Spain is counting the cost of the collapse of a decade-long property boom that’s sent home prices falling about 30 percent since the start of 2008, driven unemployment to 26 percent and burdened banks with mounting bad loans that have made them wary of extending new credit. A decision by Sareb to raze unfinished properties would demonstrate it makes more sense to knock down homes than try to sell them as an economic slump drags into a sixth year, said Fernando Rodriguez de Acuna, a project manager at Madrid-based real estate consultant RR de Acuna & Asociados.
