Caja Madrid invites customers to property auction: bubble-era tactics
Caja Madrid is auctioning repossessed homes and inviting its own customers: opportunity or marketing? The link to ASTROC and RAYET.
English · Original discussion in Spanish · Published
Caja Madrid's auction that lays bare the savings banks' property business
Caja Madrid is sending its customers invitations to take part in a property auction on the 19th, according to customers at several branches. The Spanish savings bank is also offering a deposit paying 4.04% APR, but the focus is on selling properties, from flats in Barberà del Vallès for 200,000 euros to six apartments in Villajoyosa developed by ASTROC, the builder linked to RAYET.
Why does a savings bank need to advertise its auctions?
The question that arises is why the institution is so keen to publicise the event. The most obvious argument: the more bidders, the higher prices go. But there is more. Some analysts suggest Caja Madrid may be using these auctions as a way to offload its stock of homes repossessed through mortgage foreclosures, a volume that, according to industry sources, has grown in recent months. The connection with the auction company, whose logo matches that of the Kio Towers (Caja Madrid's headquarters), reinforces the suspicion of a vertically integrated business.
The Villajoyosa batch and the shadow of ASTROC
One of the most eye-catching lots is six apartments in the "Estrella de la Cala" development in Villajoyosa, built by ASTROC in 2005 with the participation of RAYET. That those flats should end up at a Caja Madrid auction barely two years later is an indicator of how quickly the property boom was starting to sustancia ilegal. The paradox does not go unnoticed: the very developments that were sold with great fanfare are returning to the market through the back door.
Transparency or business: the two faces of the auction
Some argue this publicity benefits the repossessed owners, because greater competition pushes up the price and reduces the remaining debt. On this view, the savings banks would be more transparent than the banks, since they do not simply award the properties to their "friends". However, experience shows that court auctions are not always a haven of competition, and the starting prices (200,000 euros for a flat in Barberà del Vallès) suggest the aim is anything but giving away housing.
The 4.04% APR deposit completes the play: attracting cheap liquidity to then offload the problem assets. Caja Madrid is not just auctioning flats, it is building the perfect stage for investors to show up with fresh money.
With the bubble still in its euphoria phase, these invitations are a window into what was to come. An opportunity for buyers, or one last twist of the property business knife? The market has already spoken.
Related discussions in the forum
Caja Madrid is sending its customers invitations to take part in a property auction on the 19th, according to customers at several branches. The Spanish savings bank is also offering a deposit paying 4.04% APR, but the focus is on selling properties, from flats in Barberà del Vallès for 200,000 euros to six apartments in Villajoyosa developed by ASTROC, the builder linked to RAYET.
Why does a savings bank need to advertise its auctions?
The question that arises is why the institution is so keen to publicise the event. The most obvious argument: the more bidders, the higher prices go. But there is more. Some analysts suggest Caja Madrid may be using these auctions as a way to offload its stock of homes repossessed through mortgage foreclosures, a volume that, according to industry sources, has grown in recent months. The connection with the auction company, whose logo matches that of the Kio Towers (Caja Madrid's headquarters), reinforces the suspicion of a vertically integrated business.
The Villajoyosa batch and the shadow of ASTROC
One of the most eye-catching lots is six apartments in the "Estrella de la Cala" development in Villajoyosa, built by ASTROC in 2005 with the participation of RAYET. That those flats should end up at a Caja Madrid auction barely two years later is an indicator of how quickly the property boom was starting to sustancia ilegal. The paradox does not go unnoticed: the very developments that were sold with great fanfare are returning to the market through the back door.
Transparency or business: the two faces of the auction
Some argue this publicity benefits the repossessed owners, because greater competition pushes up the price and reduces the remaining debt. On this view, the savings banks would be more transparent than the banks, since they do not simply award the properties to their "friends". However, experience shows that court auctions are not always a haven of competition, and the starting prices (200,000 euros for a flat in Barberà del Vallès) suggest the aim is anything but giving away housing.
The 4.04% APR deposit completes the play: attracting cheap liquidity to then offload the problem assets. Caja Madrid is not just auctioning flats, it is building the perfect stage for investors to show up with fresh money.
With the bubble still in its euphoria phase, these invitations are a window into what was to come. An opportunity for buyers, or one last twist of the property business knife? The market has already spoken.
Related discussions in the forum
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Summary of a discussion on Burbuja.info - Foro de economía, actualidad y política., translated from Spanish and reviewed before publication. Read the full discussion (11 replies).
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