Alicanteos

Half of Spain’s estate agencies closed their doors last year amid a sharp downturn in the sector, according to figures from the nation’s main estate agents’ association API.

Of the roughly 80,000 estate agencies that existed at the beginning of 2007, only 40,000 have survived the slump in sales, the figures show.

‘The majority of the agencies that disappeared were businesses that many times operated with nothing more than a mobile telephone,’ API head Santiago Baena said. ‘It was the social climbers that closed, those who entered the sector because they sought easy money,’ he added.

The closure of the agencies led to the loss of some 100,000 jobs, an estimate that does not take into account the reduction in staff levels at the large real estate agencies that are still open.

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Figures presented in a report by by the Ceimigra Foundation, Bancaja and the Regional Immigration Department show that 70 per cent of properties in the Valencia region owned by foreigners are in the province of Alicante.

This latest data for 2007 indicates that foreign property sales in the province are worth €675m a quarter.

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Viva Estates, one of the largest estate agents on Spain’s Costa del Sol, has closed all but one of its offices, the latest victim of the downtown in the country’s real-estate sector. The company, which sells flats and homes to a mainly British, German and Irish clientele, has shut 13 offices and now operates only out of its main office in Marbella.

It comes after the dramatic slide of Inmobiliaria Colonial SA, the third biggest real-estate company, last month. The president, Luis Portillo, was forced out after a share-price fall of 61.37 per cent in six months.

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The plight of Inmobiliaria Colonial has raised fears of asset fire sales by indebted Spanish property companies, which could further hit already shaky property prices.
Colonial, whose stock lost nearly three-quarters of its value in a week after banks holding shares as collateral in derivative positions dumped stock on the market, has sold over 300 million euros ($441.6 million) worth of assets in the last week.
While it said these sales were part of normal activities, some analysts pointed to the three-way squeeze closing in on indebted Spanish real estate firms facing tightening credit, cooling property prices and rising interest rates.
“If everyone does this in one go, you may see an excess of product on the market, and prices may go down further,” Borja Sierra, former head of Spain for British property broker Savills , now based in New York for Savills Granite.

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With sales slumping, prices faltering and property developers despondent, Spain’s housing market evidently failed to get the soft landing in 2007 that the government and experts had predicted at the start of year.

Some experts are alarmist, some cautiously optimistic, but all agree that the sector is in crisis.

The issue is all the more important as the housing market makes up 7.5 percent of gross domestic product, according to figures from the BBVA bank. The construction industry as a whole employs 13 percent of workers.

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