Property slump hits Spanish estate agents

Half of Spain’s estate agents have gone bust in the past year due to a slowdown in the once-booming building sector.

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 mobile phone, and emerged solely to cash in on the Spanish construction boom over the past five years or so, the council’s president Santiago Baena said.

“The ones that closed are the upstarts, the ones who came into this sector because they saw easy money,” he said.

Larger, well-established companies have closed some branches but are still intact, he added.

In the heyday of the boom estate agents say buyers enticed by rock-bottom interest rates would literally line up to purchase homes. Builders did not even bother with showhomes; they just gave customers crude blueprints.

Housing prices rose 17% in 2004 and 9.1% in 2006. But interest rates have jumped3% in as many years, there is a glut of housing on the market and banks worried by the subprime crisis in the US are now much tighter when it comes to lending.

The government says housing prices in 2007 will show a more modest 5% rise. Final figures are not out yet.

Mr Baena said many more agencies will close in Spain in the next three or four months but it was good for the industry as it had become “a joke", with too many people trying to make fast money, sometimes with shady deals.