Spanish property developers may have been going belly-up, but obviously it is not only Spanish builders suffering during "the crisis". Remember what I said a while ago about Taylor Woodrow in Puerto Pollensa having failed to yet sell all the apartments at its Pollentia Mar development? Things aren't too great for the company, Taylor Wimpey as it is now. An 85% drop in the profit of its Spanish division.
The property market is in a state of stasis. The Balearics registered the greatest decline in mortgages of all the Spanish regions during June. Even the luxury end, that luxury end which "The Bulletin" would have us believe is some form of über-wedged salvation, is not necessarily enjoying the benefit of those bulging pockets. There is an agency hereabouts that wants, needs, to offload one of its offices; high overhead is a killer even at the luxury end in the current circumstances. The British market, even for those for whom high property prices may not be too challenging, has run aground, courtesy of the poor exchange rate.
There is something of a myth that the British, and other foreigners, were largely to blame (or to praise, depending on your point of view) for rises in property prices. To an extent, this was the case, but it is far from the whole story. There was one major and artificial factor in the historic elevation of property prices, and that was the introduction of the euro. I seem to have mentioned this before, but it bears repetition. It all had to do with pesetas that were never banked and which to have done so in order to obtain euros would have made those pesetas "visible". The way out of this dilemma was to buy property.
The boom in housing did clearly contribute to an overall appreciation in values, though here again one cannot be certain that all was as it seemed. The declared prices of property have increased in a land where traditionally there has been a sizeable chunk of undeclared price. Mathematics, as much as real values, fuelled the property boom. And then there were all the estate agents. That many have been the victim of the property crash may be no bad thing. So many agencies and so much desire to make healthy commissions. One fancies that the agencies were, in part at any rate, a factor in driving up prices. The director of a branch of one agency once told me that he had to curb the "enthusiasm" of his sales team for excessively high prices, but admitted that this was difficult given the equal enthusiasm amongst sellers, especially Mallorcan sellers, to extract as much as possible. The foreign purchaser did indeed contribute to upping property values, but it took and takes four to do the property tango - buyer, seller, agency and bank. Buyers were only too happy to join them on the dance floor, seduced by impressions of good investment opportunities that may not have been as they seemed. And of course the banks were only too happy to go along with it all.
A mark of the present nature of the market is that not only have agencies gone to the wall most have retrenched in terms of marketing spend. Gone, or so it would appear as one doesn't see them around, are most of the property magazines, of which there were four or five prominent ones. In spring last year, one of them approached me with regard to developing more sales in the north. It proved to be a pretty forlorn task, and that was in June of last year when the word already was of "crisis", a word that only really came into everyone's consciousness this year. The internet has become the default medium for promotion, but this is only as good as sites' optimisation can make it.
Yet there persist lunatic prices. Take this example. Friends of mine are renting a house in Puerto Alcúdia. The owner has offered it for sale at 400,000. This offer is a mere 50,000 more than a previous "valuation". How can this possibly be? The Mallorcan propensity to grab for cash is legion (and I have spoken before about the apparent "greed" that is an accusation levelled at Mallorcans), but a 14% increase at a time of extreme difficulty in the market is an obscenity of avarice; it would be even in good times. I know the property. I also know properties close by that are for sale at similar prices. The new price is totally unrealistic by comparison.
HOW MUCH IS THAT DOGGY ON THE PAVEMENT?
And continuing a theme ... It should not be overlooked that much of the canine output to be encountered on the local pavements is there courtesy of dogs without chaperon. There was me thinking that Mallorca's dogs are meant to be on the lead at all times; how stupid to think that a regulation here might be applied assiduously. Down the road lives this dog. It's a very nice dog. Pretty clever, too; either that or it has a key. Two or three times a day it goes for a trot around the neighbourhood, indulges in some prolonged and non-specific barking, finds a convenient spot as its convenience and has a good old dump. Who does let the dogs out? Not only do they have scant regard for lavatorial decorum, man's best friends have little idea when it comes to the highway or pedestrian code either. Main road? That'll do nicely. Side road? Just as good. This morning, I was about to pull away in a street in Can Picafort. Where's that damn dog gone? I saw it coming, and then couldn't see it. Had to get out to make sure I wasn't about to turn it into a dog's dinner for the local ant population.
QUIZ
Yesterday's title - Little Feat (http://www.youtube.com/watch?v=VDZn6TJwwZg). The video is an overlong recent-ish live version, but still captures the essence of what was a great piece of music. Today's title - what's the connection with their big hit and Robin Williams?
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