Spain's Property Market Meltdown

If anyone has seen the musical Man of La Manca then they are familiar with the epic sound bite being that karaoke favorite 'The Impossible Dream.' Indeed taking a twist on Cervantes tale of Don Quixote waiting for his turn at the table during the Inquisition perhaps someone should adapt a version for property developers in the titanic like Spanish property market. While the US meltdown has its 'Entourage' like mentality, the Latin version comes complete with voice over's and subtitles.
While being part of the Euro zone Spain has been on a consist downward spiral during the recent global recession. Unemployment is now forecasted to possibly breach a gasping 20%. Reports have written that by mid 2009 over 1,000,000 vacant properties litter the country and over half of these being in resort destinations. While for most of this decade the industry has been in boom town mode, expectations are for market values to drop by 20-30%.
With inventory on hand, developers are now openly discounting at high levels just to have any cash flow and for many the old adage comes that you can't bank margins, but only hard cold cash. It's a property market in free fall and expectations for many are further depreciation is inevitable.
For those sitting here in Phuket, many football fans prefer the Premier League to La Liga; with even David Beckham going AWOL from Real Madrid. But to answer the question what relevance does it have for island real estate, well the answer is plenty. In a market which continues to rely on foreign buyers, two of the primary markets have been the UK and Scandinavia. These are markets we share with Spain and with huge discounts on offer, the ability to finance and close proximity, then yes the globalization effect is going to hit these shores without a doubt.
Hopefully there are lessons to be learned here by the Spanish meltdown and greater fundamentally sound thinking must come into play. But in the meantime that's a whole lot of empty resort real estate sitting as a prime competitor to our relatively tiny market.