From Housing Bubble to Repossessions: Spain Compared to Other West European Countries

After a real estate boom the housing market took a dramatic turn in Spain, where repossessions and evictions are now a big social problem. Hundreds of thousands have lost their home since 2008 and many more are at risk. This paper provides a qualitative analysis of the Spanish experience and puts it into a comparative West European perspective. The risk of repossession was found to have six dimensions: the employment situation, the social protection schemes, the structure of the housing and housing finance markets, the lending practices, the house price development and the effectiveness of policies to prevent repossession. Spain scores' badly on all six dimensions, which explain the large number of repossessions. Only recently, and under strong societal pressure, has the Spanish government developed policies to tackle this problem.