10 | INDUSTRY News analysis
INDUSTRY By Geoff Hadwick
AS summer temperatures rise, trouble is brewing in Spain: insiders there say banks are stifl ing the property recovery by screwing agency commission rates down - and by forcing developers to the wall. Agents and developers are getting increasingly frustrated with what they see as the inept way in which Spanish banks are trying to offl oad their huge glut of repossessed properties. Around €59.7 billion-worth of homes are on the banks’ books. “It’s a mess,” says Greg Butcher of developer Ocean Village Gibraltar. “The Spanish banks just don’t respect property agents. They see them as reactive and not proactive. And they don’t feel that they can justify to their shareholders giving reasonable commission rates to an agency right now.” “The banks are happy keeping the agencies to 1.5% to 3%, perhaps 5%
at best if you make a special case,” he goes on. “They are not ready to go anywhere near a proper 10% commission rate yet.” The end result is not enough margin
in the process to attract good quality agencies, says Butcher. “The market is not going to move,” he adds. “We keep telling the banks that there is nothing wrong with the concept of Spain and that north European buyers will come back, but not until they start controlling their price discounts properly and start to bring in a much more professional and aggressive approach to sales.” Ian Waudby of Crest Group International agrees. “We come across master agents who get 5% but most agencies are struggling on 1.5% to 3% commission rates and that is not going to change,” Waudby confi rms. “It is a very, very diffi cult situation; there is no margin for the sales network to reinvest and lots of agencies are not going to be able to make a profi t.”
www.opp.org.uk | AUGUST 2010 Spain’s banks are stifl ing its recovery
Clampdown | Spain’s banks are making a bad situation worse say property experts
To make matters worse, banks like Santander and BBVA have set up their own internal sales agencies - but they are domestically focused and the staff involved often only speak Spanish. “Their strategy was to wait for a
summer rush in sales,” says Butcher. “A rush that is not going to come. We’ve had dozens of meetings with the banks and told them that their internal agencies
are not going to be any good at selling to north European buyers, who will be the real market when things come back.” Miguel Martinez-Marino of Bancaja
Habitat is trying a different route on behalf of his bank. He will give 5-10% commission depending on the volume of properties sold, he says. “We have decided to use a network of UK agencies and we are fi nding buyers for sure.”
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