 MADRID, Spain (AP) -- Half of Spain's real estate agencies have folded in the past year due to a slowdown in the once-booming building sector, an industry association says.
Of 80,000 that operated at the beginning of 2007, only around 40,000 have survived and some 100,000 employees lost their jobs, according to the Superior Council of Real Estate Agents, a nationwide grouping.
However, many of the agencies that collapsed are small -- sometimes just a person with a cell phone -- that emerged to cash in on the Spanish construction boom over the past five years or so, the council's president Santiago Baena told the newspaper El Pais.
"The ones that closed are the upstarts, the ones who came into this sector because they saw easy money," Baena said. Larger, well-established companies have closed some branches but are still intact, he added.
In the heyday of the boom, real estate agents say buyers enticed by rock-bottom interest rates would line up to purchase homes. Builders did not even bother to construct model homes; they just showed customers crude blueprints.
Housing prices rose 17 percent in 2004 and 9.1 percent in 2006. But interest rates have jumped three points in as many years, there is a glut of housing on the market and banks spooked by the subprime crisis in the United States are now much tighter when it comes to lending.
The government says housing prices in 2007 will post a more modest 5 percent rise. Final figures are not out yet.
Baena said many more agencies will close in Spain in the next three or four months but that this is good because the sector had become "a joke," with too many people trying to make fast money, sometimes with shady deals.
Source: http://biz.yahoo.com/ |
