Euro Zone Crisis-Local Impact

[djk99]

Trading in shares in Bankia have been suspended in Madrid.

The market regulator CNMV said it was "due to circumstances that may affect the normal share trading".
Extra funding probabilities come amid continuing  rumours that the Spanish  government is studying turning Bankia into a massive nationalised bank by merging it with even more troubled cajas - Bankia might absorb Catalunyacaixa and Novagalicia. Other smaller banks that have been rescued by the state might also be thrown into the pot.
Bankia is reported to be due to ask the government for a further bailout of more than 15bn euros after a board meeting at 16:30 today. The markets will have closed for the weekend by the time any announcement is made.

[appy ammer]

i;ve closed off all my fx trades for the weekend

[MinRich]

Anything about for £50k []

[Cameron]

yes of course theres a very nice rustic detatched goat shed in lajares. If you could go a little higher theres even one with a roof in La Oliva.

[andi]

I was offered a 2 bedroom apartment opposite Rock Island Bar (of Mike Duffy fame) for 42,000 € (just £33,000) a week or so ago. Not exactly a sea view but spacious, right in town and obviously a decent buy for someone.

[appy ammer]

quote:Originally posted by MinRich

Anything about for £50k []

told you to wait;)

[PeterHeirman]

The 12 is the median between 10 and 15. I could have used 12.5 too.
It's a rule of thumb. Price additionally depends on location, condition, state, facilities, equipment, appliances, garden with plants/grass, ...
A fully equipped kitchen can cost €3000 but also €12,000.

[Cameron]

the vultures are circling ready to pick the bones)

[djk99]

I think the vultures need to be careful what they pick...crashes  destabilise whole communities in many ways. The quiet, friendly, rubbish free, well lit street, your dream house is on at the moment may not retain all those features following a fire sale.

[djk99]

quote:Originally posted by PeterHeirman

Price additionally depends on location, condition, state, facilities, equipment, appliances, garden with plants/grass, ...

Not to mention Michael O' Leary and friends.

[andi]

Not with you djk99, Fuerttteventura is hardly the East End and the Free Welsh Army equilavalent haven't started burning holiday homes yet lol.

[Cameron]

he means you could end up with minrich as a nieghbour)

[appy ammer]

quote:Originally posted by Cameron

he means you could end up with minrich as a nieghbour)

lol

[andi]

Or perish the thought.....Sognet []

[MinRich]

Would never buy a property in a foreign country , not even for £30k

[andi]

Guess its each to their own.[]

[djk99]

quote:Originally posted by MinRich

Would never buy a property in a foreign country , not even for £30k

You're not alone there MinRich, sharp practice abounds:
http://uk.reuters.com/article/2012/05/20/uk-sunday-london-homes-idUKBRE84J03L20120520

[andi]

Buy 3 two bedroom apartments at 40K in central town locations and the combined long term rent is conservatiively 1200 euros per month.....that's 10% + income  on investment taking into account a few unoccupied months each year.  Who cares about capital growth (or loss for that matter)  if youre getting that per month?[]

[appy ammer]

andi 40k London?

[MinRich]

So where are 40k 2 bed apartments advertised then ?

[andi]

They are not in London as we all know.....that's why overseas properties still hold out as they are so much cheaper. Getting centrally located 2 bed apartments is possible right now for 40k but like everything else in life you need to do some ground work by speaking to locals.

[djk99]

So, perhaps the Greeks aren't going to leave the Euro zone after all!! .This will be a major disappointment to some  nations, multi-nationals and I suspect many middle class Greeks who have been planning for a Grexit and positioning themselves accordingly. As markets were buoyed by an opinion poll showing pro-bailout parties ahead in   Greece's June 17 elections, reducing the risk of it abandoning the euro, the rise in Spain's borrowing costs showed the Bankia bailout is making investors nervous. Spanish Prime Minister , Mariano Rajoy, insists there will be no external bailout required for Spanish banks, but, he admits the government had not yet decided how to raise the €19bn needed to complete the Bankia bailout – the preferred option would be to convert it to Government debt - Bankia could then use that as collateral to receive cash from the European Central Bank, shifting part of the rescue burden outside Spain.
But, Bankia is somewhere between the tip of an Ice cube and an Iceberg in this  -  Spain's central bank estimates some €180bn of potentially loss-making toxic real estate assets  from the 2008 housing bust are held by banks. Bankia holds just €32bn of that total, so we should expect more news regarding this as various bank's accounts are (not) being  signed off by independent assessors. I wonder if the ECB would wish to fund the total amount in this way?
Spanish borrowing rates have recently jumped to  6.5% interest on future 10-year debt. That takes  the rate just 0.5% short of the figure that other Eurozone countries such as Portugal  and Ireland had to request a bailout.

[macb]

Spain also needs a bailout. It is only political posturing and the PM's pride which stops the admission at this stage. We will need to wait for the next crisis or the funding difficulty for Bankia. There is so much more false accounting of property stock. The Americans might be primitive but this false accounting is not allowed to fly over there and it should be the same here. Look at property prices in Florida if you want to see the real state of affairs. The true value of property has to come out sooner or later. In the US it is sooner and the liars are jailed for false accounting. In Europe, the authorities are colluding in the cover up, meanwhile hoping a recovery will sort it out before the banks all go bust. Four years on it looks like they are backing a loser.

[PeterHeirman]

@MACB: my boss bought a 3 bedroom bungalow in Arizona (near Phoenix) for USD$55,000 (no clue what he is going to do with it or how much time he wants to spend there - but he bought it).
A friend bought a 2 bedroom bungalow (1 car garage) in South Florida Homestead about 2 miles from Atlantic Ocean for USD75,000 (got some discount on asking price)
For USA prices: http://www.zillow.com/
It is something similar to this: http://www.zillow.com/homedetails/25585-SW-138th-Pl-Homestead-FL-33032/63833982_zpid/
Notice graph below: from USD260,00 in 2005 to USD72,000
There are plenty available at $70,000 - $80,000 (Sept 2006: USD230,000)  http://www.zillow.com/homedetails/395-NE-14th-St-Homestead-FL-33030/44376181_zpid/

[djk99]

Looks like they mean business. Offer for sale at around 30% of the 2005/6 value....if not sold in 7 days then open to offers !!

[PeterHeirman]

@djk99 The same is likely to happen in Spain - where there are many times more houses/condos for sale compared to the US (per capita).
Moreover it is expected that the number of foreclosures will triple due to unemployment and the English leaving the country.
The big difference with US: Those who default on their mortgages cannot walk away from the debt, as in the US.
http://www.goldonomic.com/real-estate/category/spain
The Pain in Spain will become very Plain.

[djk99]

Good article PeterHeirman, As I've said here before...we will get much more information by looking at how much effort the IMF / ECB etc put into helping individual states when they get into trouble. At the moment it would seem the E.U. could get along nicely without either Greece or Spain. I take your point about Spain's housing market, but, something will need to give in this process of  mortgage debt,  otherwise the majority of Spain's citizens will be criminalised and no buyer from the U.K. or anywhere else in Europe will want to put their main home at risk by purchasing a second house here – further depressing the market. It really doesn't help either when no-one seems to be sure whether some housing stock is 'legal' in the first place. It's a 3D minefield.

[PeterHeirman]

According to El Mundo
http://www.elmundo.es/elmundo/2012/06/14/suvivienda/1339657709.html
there is already 30% off for real estate from the highest prices in 2007.
The decrease seems to be increasing in speed.
When comparing to Ireland there is another 30-35% to go:
http://www.globalpropertyguide.com/real-estate-house-prices/I
http://www.globalpropertyguide.com/real-estate-house-prices/S

[emmi]

This is what is happening in France

http://www.thisismoney.co.uk/money/mortgageshome/article-2158326/British-expats-France-face-shock-8-000-fine-declare-inheritance-trusts.html?ito=newsletter

[PeterHeirman]

Expect another 25%- 35% drop
http://www.zerohedge.com/news/sp-spanish-home-prices-drop-another-25
http://www.mindfulmoney.co.uk/wp/qfinance/spain-the-property-bubble-comes-home-to-roost/
Comparing to Ireland: expect 35% as not many in Europe have money to buy property abroad - and those with money already own a second home.
Swiss, Belgians, Germans, Norwegians and Swedes still have savings.