Re: This could change everything
 

Right, and what have the UK, US and Spain done to the banks?

They've bailed them out to the tune of billions of tax payers pounds/dollars/euros

So people should be allowed to fail, wither and die, but banks should not

What on Earth have we become? :frown:

Re: This could change everything
 

But as and when their economic situation improves these families will be able to pay higher rents and maybe buy the properties they live in, so the banks will benefit in the long term. In the meantime they will at least maintain them and stop squatters moving in. It has to be better than having properties standing empty and falling into decay, surely?

Re: This could change everything
 

I agree with everything you've said. Unfortunately, history can attest to the fact that once you give something to the public, you can't get it back without doing really, really unpopular things, even if it's the only way to survive.

I think the newly reborn debate about Thatcher is a great example. Britain was well on it's way to a socialist state and headed into poverty. Social unrest, increasing vindictiveness against the very entity providing social welfare, full of massive waste and social spending far beyond its means. The social system was (and still is, although less so now) very generous. But then Thatcher's government came along and did the responsible thing (not the popular thing), blasted way the waste, and completely revitalised Britain, putting it back on the track of prosperity - arguably, saving it from near certain implosion. And yet, she is perhaps the most scorned leader in British history, simply because she had little choice but to reverse much of what had been generously and irresponsibly granted to the public.

Once you give it, you just can't take it back. I'd strongly suspect the banks would end up having to write all of them off anyway, leading only to yet another crisis.

But yes, I otherwise think it's a nice idea. You just have to do it with the knowledge that in the end, these properties would likely have to be written off.

Re: This could change everything
 

I certainly don't harbour any naive notions that the banks have not been (and to a large degree still are) run blatantly irresponsibly and with self-interest. I think that's rather indisputable, and we needn't argue that.

But the fact remains that the banks are demonstrably teetering on the edge of collapse. I can't help but question whether pushing them over the abyss and causing widespread panic and ultimately, widespread poverty would be the best way to fix it.

But then again, it often takes events of that magnitude to inspire change...

Re: This could change everything
 

I haven't seen any evidence yet that these properties won't have to be written off eventually. As it stands, the banks are not receiving one euro in income from them, they aren't paying community fees for them in the case of ones that have been repossessed, leading to many problems for other owners, and they aren't paying IBI. This proposal has to be better than letting them stand empty.

Re: This could change everything
 

I have a very hard time believing that Spanish real estate will never again have demand, but if Europe does indeed implode, that may well be the case.

It's better than letting them stand empty. Agreed. But it's not so simple. Really.

Again, I see a lot of possibility for it turning out to be "not what was intended" at the end of the day. If I were a bank in possession of these properties, I'd want to have pretty damned good assurances that I can indeed legally sell the properties when possible. Somehow I have a doubts that a sale would ever be possible after many would become "sitting tenants" with "rights" to these nice gifts, whether they pay the rent or not. There's also the likelihood that many tenants would destroy the properties.

Then there's the black market - the competition to get into all these low-cost lovely foreclosed properties that are (by law) supposed to be allocated to those that "qualify" as "impoverished". The black economy in Spain isn't exactly a secret. I'd have to believe a lot of under-the-table money would exchange hands there - and the truly impoverished ones would likely be the losers. And government regulation would ultimately be complicit in it, as it usually is.

It's a great idea, but not simple to execute. If there were a realistic way to do it, the beneficiaries would actually be those who need it, and those benefiting realised that it's not an "entitlement", I think it would be great.

Re: This could change everything
 

Proof that you can't read the Spanish article ;)

The idea is that the banks must either sell or rent out their properties on the free market. They are not going to be given to the unempoyed or needy

The banks will be fined for the empty properties they have by the junta de andalucia - up to 9k euros per property per year. This money will be set aside by the junta to provide social housing for the most needy

Re: This could change everything
 

Presumably by renting it from the banks that own it?

Re: This could change everything
 

That is one presumption, it didnt say in the article

Re: This could change everything
 

Well, I reckon my poor Spanish explains why I am unable to grasp the notion Spain is the world's #1 at everything. At least it seems to be your best explanation for everything you otherwise have no explanation for.

Here's what I don't understand: If the banks are refusing to make these properties available for sale or rent, then what is the logic of the bank? They hold an asset capable of generating liquidity or revenue through sale or lease, but refuse to leverage it in their favour, as their balance sheets decline?

What could possibly be the logic in that? Could it be that nobody can afford it? Why not? Oh, it's because they should be offering them for €100/mo or €25K sale price? No, I think it's because most people just can't afford much of anything, unless it's "almost free".

And so the answer is a government regulation requiring they sell or rent at any price they can get, subject to large fines for non-compliance, and that would constitute a "free" market, wouldn't it?

And I'd reckon the first bidders in line would be the big developers who'd turn around and offer them for double or triple what the government required the banks to sell them for.

Right, then. That'll solve our problems.

Re: This could change everything
 

On the bank balance sheets they must write the value fo their assetts. For unsold property they write the value that their valuers have given it e.g. 2 bed flats on the CDS for 250k. This makes their balance sheet look healthy

In reality, they would only get 80k for that flat so the bank has 170k less assets than they are declaring. Multiply this by 100,000 properties or more, and it is easy to see that many banks will go bankrupt if they declare the true sales value of their assets

Re: This could change everything
 

So, justification for the bailouts they need are by appearing healthy.

OK, I get it.

By the way, several banks around here are selling foreclosed apartments and even a few houses for €25K - €50K. We were thinking of trying to buy one, but we found out they all get bought up very quickly by those that have cash, not by those who don't.

Re: This could change everything
 

No. I am telling you want the banks are doing currently. Only a few banks have been bailed out so far because the other ones are doing creative accounting on their balance sheets through keeping 100,000s of properties empty rather than selling them at current market value

Re: This could change everything
 

Solvia is now offering up to 40% discounts on parts of their stock.

However, how many Spaniards can get a mortgage - if they wanted one.
:confused:

Re: This could change everything
 

The real problem is many of the properties are built in areas the Spanish don't wish to buy in.