The appearance was described as the first stop on a planned public relations roadshow, which is aimed at encouraging foreigners to consider buying holiday homes in Spain. It was immediately denounced by groups of Britons who have lost out after their holiday homes were declared illegal as a result of corruption, retroactively-implemented planning laws and unscrupulous property developers.
Some investors protested outside the Spanish embassy, where Blanco appeared, according to press reports.
Other groups, such as the Spanish Bank Guarantees Petition and Finca Parcs Action Group, are reported to be organising online petitions to urge the Spanish authorities to focus on their problems with the country’s banks, which are related to the holiday home market matter.
In addition to its problems with illegally-built properties owned by foreigners that have soured its holiday home market, Spain has also been struggling with an ailing economy. However, in his presentation, Blanco noted that Spain’s economy was "beginning to show its first signs of recovery", with its fourth-quarter GDP having risen by 0.6% compared with the same period a year earlier.
The promotional tour is scheduled to travel to six countries, and in addition to Blanco, will also feature appearances by Spanish housing minister Beatriz Corredor.
In his presentation, Blanco acknowledged the problems some earlier investors in Spanish property continue to struggle with, but suggested they were not as widespread as they have been made out to be.
According to Bloomberg, the promotional tour by the Spanish officials comes after members of the European Parliament renewed earlier calls for the EU to some of its funds earmarked for Spain until the country sorts out its problems with the out-of-pocket holiday homeowners.
In 2009, a European Parliament report criticised Spain’s handling of coastal properties and its retroactive application of restrictions on development.
Meantime, there are suggestions Spain’s property market, though soft, has further to fall.
Ignis chief economist Stuart Thomson, for example, says Spanish property prices, which trebled during the boom, "have fallen by only 13% according to official figures (which are based on distorted surveyors’ appraisals rather than transaction prices), despite the fact that one third of the housing stock was completed during the boom, and according to government estimates”.
Thomson, whose remarks are contained in a story on the Portfolio Adviser website today, added: "The preponderance of substantial transaction price declines clearly shows that the property losses are significantly greater than implied on bank balance sheets, particularly [in] the dysfunctional Cajas [Spanish savings banks]”.
Thomson believes that Spain, given the size of its economy and its resultant status as a “too big to fail” nation, is in something of a double bind: “Spain is important for the rest of Europe to escape contagion from peripheral sovereign debt crisis, but the rest of the world and in particular the rest of Europe must continue to provide a locomotive for the Spanish economy."
