European Cities That Experienced The Boom Are No Better
News Posted On: 07 March 2014
From demolished estates in Dublin to the unused Ciudad Real airport, European boom cities have much to recover from. What's more is that these cities have debts lurking in the backdrop too, from an array of bad deals.
Although Spain and Ireland have managed to break-free from the European Union's lending, the vacant properties that are the remains of the previous real-estate boom, continue to spell trouble in most European cities.
Spain and Ireland clear off European Union debts
Dublin won a lot of praise, before the 2008 crisis hit countries worldwide. Despite the fact that its tech boom subdued a little, its real-estate market was still soaring high, as house prices continued to shoot up and people continued to splurge.
This, however, wasn't long lasting, as the Dublin property market could not hold up for long and came crashing down. One of the largest banks in the country went bankrupt when faced with the European financial crisis, and as the property market headed on a downward spiral, the housing prices lost nearly 50 percent, in just a year.
The parliament (the Dail), was quick to act, making changes, so it quickly bounced back to become one of the first countries to repay its loans to the European Union. Spain, despite being held down by its broken down real-estate market and bad banks, is all set to follow in the footsteps of Ireland.
A genuine recovery or just a facade?
The recovery has been met with much skepticism from the outside, as some think it is just a theoretical improvement. Dublin's new homes in the suburbs are being destroyed so as to keep the property values of the surrounding homes in the league.
And this isn't the case with just the economically backward bunches, as even the well-to-do ones are often caught up in their mortgages. Valencia, in Spain once boasted of its opulent urbanist home models, with architects such as Santiago Calatrava turning the riverbed that had dried out into a cultural corridor, backed by lavish public funds.
The city saw its coastal areas rev up with second homes and hotels, when the real-estate market erupted. But the same cannot be said about the current scenario in Valencia. The construction industry has dried up, and knowing how important a part it was of Valencia's economy, the unemployment rates have gone up too, to about 26 percent.
Portugal, Bulgaria, Cyprus and Greece have cities that have met with a similar fate too, with vacant spaces that were built when the real-estate market was on full throttle.
A few Europeans think that the Brussles technocrats are to be blamed, for not keeping a close watch on the credit, along with over-stating the importance of real-estate in cracking the economic plan for the not so well-to-do sections.
Others say that, just as it was with the US, the under-regulated, reckless banking sector shares a fair part of the blame too, as they financed projects without addressing the risk boundaries.
Written by Les Calvert of www.property-abroad.com
Back to news articles for this country