Recently Madrid-based influential real estate market analysts R.R. de Acuña & Asociados released the annual report on the property market in Spain. Releasing the report, Fernando Rodríguez y Rodríguez de Acuña, president of the company said “There are no green shoots around here” describing the state of the Spanish property market.

This is not surprising since Spain’s property markets has been booming to incredible levels until the credit crisis started. The construction sector offered jobs to millions of locals and migrants alike. However in recent months that has changed dramatically. The unemployment rate in second quarter reached to 17.9% more than twice the European average.

Demand for housing is expected to be about 220,000 homes per year while there were 1.6 million unsold houses at the end of 2008. At these levels it will take 6 to 7 years for the market to recover.

Fernando Rodríguez pointed out that “The market situation doesn’t justify more building, and anyway the banks won’t lend money to build something that won’t sell” and and predicts that 75% of all Spanish property developers will be wiped out in the next 5 years due to excessive debt, the current property market slump and “bad management”.

Mr.Fernando Rodríguez makes an astute observation on the Spanish market. This scenario holds true for the U.S. market as well. There is no reason for developers to continue adding to the existing inventory. However some builders are already starting to initiate new development plans here.

Due to their significant overseas presence, the two largest banks of Spain, Banco Santander(STD) and BBVA(BBV) are not impacted heavily by the domestic housing market collapse. In addition to Europe, Latin American these two banks are also concentrating on expansion in the U.S. Santander bought Sovereign Bank and more recently BBVA acquired the failed bank, Guaranty Financial of Texas.