Forum User Claims Foreclosures Are Skyrocketing
A forum user argues that foreclosure rates are surging while three-bedroom flats in Las Rozas are listed below €600,000.
English · Original discussion in Spanish · Published
Foreclosures are Skyrocketing," according to one forum user, and the brick market is finally giving way
How much pressure does a monthly mortgage payment need to withstand before someone stops paying? In the forum, some users claim that mortgage foreclosures are surging in Spain, just as property prices begin to soften, according to several participants in areas that seemed impervious until recently. One user living in Las Rozas (Madrid) reports that three-bedroom flats with garage and pool are now being advertised for under €600,000, compared to the €650,000 to €700,000 they commanded three months ago. According to him, the price drops by one or two units every week. There is no panic on the streets. There is another thing: sellers who, according to this account, have stopped believing that prices never fall.
Why are prices falling in Las Rozas and Majadahonda?
According to the sequence described by one participant, the stock is not turning over, and the seller eventually capitulates: the listing remains, no buyer enters, similar units accumulate, and someone breaks the market downwards to place their own. From there, the rest of the street has to reposition.
Another user describes the Majadahonda case: a terraced house that was listed at €800,000 finally sold in August for €740,000 after more than a year on the market. The reduction was €60,000. According to this same account, that terraced house was originally built as affordable housing.
New construction supporting the market
One user points out that building a small flat today costs around €250,000, and this must include taxes, salaries, licenses, and profit. This is the argument of those who defend that the margin for decline is limited. Opposing it is real demand, and there the numbers clash.
How much must a house bring in to cover a €600,000 mortgage?
One user calculates that a €600,000 mortgage over a reasonable term requires a monthly payment exceeding the average salary in Spain, and in return, you buy a 70 square meter flat at best. The mismatch between the cost and what is received is, for him, the heart of the matter.
Employment as the trigger and the unanswered question
For one of the participants, any real estate correction begins with prices and ends with unemployment: first, the stock doesn't move; then, the worst segments drop, and only when layoffs arrive does the ground break. Some hold that layoffs are already happening in large companies for well-paid positions; the question circulating is not whether there will be an adjustment, but who will pay for it.
The other unknown is foreign capital. Some maintain that there is money ready to buy at any price, and one user mentions institutional funds waiting for corrections to enter. If that happens, the fall will slow down before many expect.
It's not 2008, or maybe it is: the two predictions
The optimistic scenario, in one user's words, speaks of stabilization and sideways movement for one or two years. Another maintains that "it's not a crash like 2008, it's a 2008 on steroids." In between lies a repeated idea: with current salaries, present prices cannot be sustained without a buyer who is not dependent on their paycheck.
Given this outlook, the most repeated advice is not to sign anything. If they are right, one user predicts that 2027 will bring interesting offers. If they are wrong, people will continue paying rent while someone else pays the mortgage.
Sources cited in the thread: La Razón, afectadosporlahipoteca.com.
How much pressure does a monthly mortgage payment need to withstand before someone stops paying? In the forum, some users claim that mortgage foreclosures are surging in Spain, just as property prices begin to soften, according to several participants in areas that seemed impervious until recently. One user living in Las Rozas (Madrid) reports that three-bedroom flats with garage and pool are now being advertised for under €600,000, compared to the €650,000 to €700,000 they commanded three months ago. According to him, the price drops by one or two units every week. There is no panic on the streets. There is another thing: sellers who, according to this account, have stopped believing that prices never fall.
Why are prices falling in Las Rozas and Majadahonda?
According to the sequence described by one participant, the stock is not turning over, and the seller eventually capitulates: the listing remains, no buyer enters, similar units accumulate, and someone breaks the market downwards to place their own. From there, the rest of the street has to reposition.
Another user describes the Majadahonda case: a terraced house that was listed at €800,000 finally sold in August for €740,000 after more than a year on the market. The reduction was €60,000. According to this same account, that terraced house was originally built as affordable housing.
New construction supporting the market
One user points out that building a small flat today costs around €250,000, and this must include taxes, salaries, licenses, and profit. This is the argument of those who defend that the margin for decline is limited. Opposing it is real demand, and there the numbers clash.
How much must a house bring in to cover a €600,000 mortgage?
One user calculates that a €600,000 mortgage over a reasonable term requires a monthly payment exceeding the average salary in Spain, and in return, you buy a 70 square meter flat at best. The mismatch between the cost and what is received is, for him, the heart of the matter.
Employment as the trigger and the unanswered question
For one of the participants, any real estate correction begins with prices and ends with unemployment: first, the stock doesn't move; then, the worst segments drop, and only when layoffs arrive does the ground break. Some hold that layoffs are already happening in large companies for well-paid positions; the question circulating is not whether there will be an adjustment, but who will pay for it.
The other unknown is foreign capital. Some maintain that there is money ready to buy at any price, and one user mentions institutional funds waiting for corrections to enter. If that happens, the fall will slow down before many expect.
It's not 2008, or maybe it is: the two predictions
The optimistic scenario, in one user's words, speaks of stabilization and sideways movement for one or two years. Another maintains that "it's not a crash like 2008, it's a 2008 on steroids." In between lies a repeated idea: with current salaries, present prices cannot be sustained without a buyer who is not dependent on their paycheck.
Given this outlook, the most repeated advice is not to sign anything. If they are right, one user predicts that 2027 will bring interesting offers. If they are wrong, people will continue paying rent while someone else pays the mortgage.
Sources cited in the thread: La Razón, afectadosporlahipoteca.com.
Summary of a discussion on Burbuja.info - Foro de economía, actualidad y política., translated from Spanish and reviewed before publication. Read the full discussion (49 replies).
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