Real estate sector sees light at end of tunnel

After six years of tough times after the crisis hit, the real estate sector in Spain is finally starting to see the light at the end of the tunnel. Many major real estate titans have fallen in the past couple of years, and the ones that survived have done so thanks to wide restructurings as they shaved over two million jobs and sold off millions in assets.

But finally there are signs that their balance sheets and the markets are improving. In the past year, the eight largest real estate companies in Spain are still alive after cutting their bank debt by 23.4%. Without a doubt, this is good news, but the downside is that these companies still owe around 12.5 billion euros. Quabit, Colonial and Renta Corporation have slashed their debt load the most. Meanwhile, Realia, Reyal Urbis and Martinsa are way in the red and perhaps near bankruptcy. The latter two companies might resort to a new bankruptcy law in order to stay in business, but at a much smaller scale.

For those that stayed in the game, the reward is increased real estate buying thanks to the European Central Bank?s decision to pump money into the region?s economy. Also, prices on new construction homes are going up. Rising from the ashes, the Spanish real estate sector is gaining strength. Yet jobs in the industry will remain slack for a while as sector managers try to avoid repeating their past mistakes.