Britons pursuing their dream of a house in the sun were warned yesterday that an outburst of panic in the Spanish construction sector would see the value of the overpriced properties they have bought in recent years plunge."This is not good news for UK investors in Spain," said Diana Choyleva, chief economist at Lombard Street Research. "We have had over-investment on a gigantic scale."A wave of panic spread through the Spanish bourse over the past week as property developers saw up to 65% of their share price wiped out in frantic trading. The loss of confidence came amid growing signs that the market was already suffering from overbuilding and rising interest rates on euro mortgages. "We will definitely see house price growth stop and a fall in nominal prices is likely in Spain over the next 12 to 18 months," Ms Choyleva said. Article continues Widespread corruption in the Spanish building sector together with property laws in some regions, such as Valencia, which have been denounced as abusive to buyers and owners, had set the scene for this week's dramatic downturn.At the centre of the drama are the coming men of Spain's business world: builders and property developers who have ridden an unprecedented construction boom that shot them into the club of the world's richest people.
"This is not good news for UK investors in Spain," said Diana Choyleva, chief economist at Lombard Street Research. "We have had over-investment on a gigantic scale."
A wave of panic spread through the Spanish bourse over the past week as property developers saw up to 65% of their share price wiped out in frantic trading. The loss of confidence came amid growing signs that the market was already suffering from overbuilding and rising interest rates on euro mortgages. "We will definitely see house price growth stop and a fall in nominal prices is likely in Spain over the next 12 to 18 months," Ms Choyleva said.
Article continues Widespread corruption in the Spanish building sector together with property laws in some regions, such as Valencia, which have been denounced as abusive to buyers and owners, had set the scene for this week's dramatic downturn.
At the centre of the drama are the coming men of Spain's business world: builders and property developers who have ridden an unprecedented construction boom that shot them into the club of the world's richest people.
