Spain's Housing Inferno (Musical Tribute)

Spain Property Delinquencies May Jump, Moody's Says (Update3)
Oct. 2 (Bloomberg) -- Spanish property loan delinquencies may increase as much as 15-fold by the end of 2008 as interest rates rise, Moody's Investors Service said in a report.

Loan-payment arrears by developers and builders may reach 5.5 percent of total property loans from the current 0.37 percent, according to the New York-based ratings company. The increase would mark a ``soft landing'' for Spain's 12-year property boom, Moody's said in a report called ``Spanish Banks and Real Estate.''

After rising 178 percent between 2000 and 2006, more than any other country in Europe, Spanish home prices are being threatened as the highest European Central Bank interest rates in six years curb consumer spending, Moody's said.

``In the Spanish context, I wouldn't call this a soft landing,'' said Charles Dumas, international director at Lombard Street Research Ltd., a consulting firm in London. ``When housing slows down, labor and income will slow down and spending growth will also slow down.''



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