Eagle Quest Properties

Arancha Ibarra considers herself one of the lucky victims of Spain’s housing collapse.

After struggling to find a buyer for her renovated two- bedroom apartment in Madrid for two years, Ibarra found a tenant for 750 euros ($1,066) a month, becoming one of the 1.5 million second-home owners thrust onto the country’s rental market.

The number of properties for rent in Spain climbed 55 percent in the past two years to 3.3 million, the highest since the Ministry of Housing started collecting the data in 2004. Rents in cities, including Madrid and Barcelona, are falling for the first time in seven years with declines of as much as 8 percent, according to Madrid-based property research firm Idealista.com.

“Those who need to sell but can’t are being forced to lease,” said Fernando Encinar, co-founder and head of research at Idealista.com, Spain’s largest real estate Web site with 308,000 listings for rent and purchase. “We haven’t seen this number of properties for rent since the 1950s.”

via Spanish Rents Fall in Worst Housing Glut Since 1950s (Update1) – Bloomberg.com.

And therein lies the problem: Less employed workers means less discretionary spending, less homes being built, bought and sold, less trips or none to the local mall, less warehouses needed, less manufacturing, less transportation… all resulting in a big pullback in GDP.

Consumers are spending less, not more. When they do spend, it’s on staples: food, gas and clothing.

via How to invest real estate | The Commercial Real Estate Fallout: Profiting From the Death of the Shopping Mall – Contrarian Stock Market Investing News – Featuring Bargain Stocks.