clancy idly flipped through a glossy brochure that vaunted the qualities of
the Solaris World Resort, an audacious property development set in the
semi-desertic scrubland of Murcia. It was one of a dozen brochures he had
collected from those caught up in the collapse of the now defunct Grupo Martínez
Construcciones. It described in glowing terms one of the gated communities the
group had planned, set around what they described as world class golf courses,
targeted at mainly British buyers. The brochures presented artist’s impressions of
fairways and greens surrounded by landscaped groves of rugged local hardwoods
and pines set against the back drop of the Sierra Espuña.
Clancy recalled flying down to the Costa del Sol with the City broker Tom Barton
as part of a group of prospective buyers. Martínez had sold more than ten thousand
dream homes to British, German and Dutch buyers, from one hundred and fifty
C
thousand euros upwards. Its urbanacciones were in different stages of completion,
or incompletion, when the Spanish group went under leaving its luckless buyers in
the lurch.
The group had acquired vast expanses of low quality agricultural land in the
relatively poor region of Murcia, situated between a national park and the
Mediterranean, for its residential developments that were to include golf courses,
shops, restaurants, cinemas and even schools.
Murcia, one of Spain’s driest regions, needed huge quantities of water and
development plans included the construction of desalination and water recycling
plants to provide future home owners and their golf course with the freshwater
needed.
Liam Clancy had observed first-hand the hard-sell techniques employed by sales
agents during the boom, which he was forced to admit echoed the methods he had
used as a trader. In the space of eighteen months everything had changed, just as it
had in the front office of trading firms. Similarly it was no longer possible for
buyers to obtain a cheap mortgage in euros. The days when the down payment of a
few thousand euros on a property sealed a deal were gone. The idea of punters
buying two or three apartments, in the hope flipping them at a profit before
completion, was as dead as the dodo.
On Clancy’s first trip to Spain with Barton, loans had been abundant with
mortgages available at up to 115%. A simple credit card deposit secured an offplan two bedroom apartment with a euro loan at less than four percent interest for
pressed weekend buyers in a hurry to be home for Sunday evening.
A visit to a Martínez urbanaccione had been a must for any prospective buyer.
Once they collected their bags from their low-cost Ryanair flight, they were
ushered out of the airport to an airconditioned people carrier by good-looking
smooth talking salesmen and women with cool drinks to distract them. The
salespersons first job was to attract the buyers’ attention to anything but the barren
scrubland that flashed past on both sides of the motorway as they left the newly
built airport for the coast. The unsightly landscape of plastic greenhouses that
covered every square metre of available arable land was veiled by the curtains
covering the tinted windows.
Once arrived at the urbanaccione the visitors were checked-in at the gate by
smartly uniformed guards. Then after slowly rolling past the clubhouse ― its car
park filled with glinting up-market SUVs ― they were delivered to the promoter’s
luxuriously appointed sales office. They were quickly bustled in, out of the blazing
sun, where they were made welcome by smiling hostesses who offered them
another round of refreshing drinks, leaving them to explore the appealing display
of the architect’s elegantly presented maquettes of villas and apartments for sale.
Then, after a glowing introductory presentation, came the obligatory visit to the
show homes, decorated with stylish modern and traditional Spanish furnishing,
surrounded by manicured lawns with terraces overlooking the sparkling clear water
of swimming pools.
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It was hard for the visitors not to be seduced. The contrast with the leaden skies
of London, Birmingham or Dublin could not have been greater. The startling green
of the Mediterranean vegetation, the bright flowers and water jets scintillating in
the sun enchanted the new arrivals. The glowing complexions of the salespersons
and employees radiated health in comparison to the tired and pale faces of the
visitors from cold damp northern Europe.
The last stop on the tour was a visit to the golf club where they could mingle with
happy homeowners, those who had already made the right decision and were now
enjoying drinks before or after a round of golf. Lunch was in the clubhouse
restaurant, there they were joined by a tanned English speaking golf pro. The tables
were carefully chosen, overlooking the pathway leading to the first tee, along
which gardeners copiously watered the bright green grass and the dazzling
flowering shrubs.
The visitors were now ready for the softening up process, plied with cocktails,
followed by a four course lunch with waiters diligently ensuring their glasses were
topped-up with strong Spanish wines. After coffee and cognac was served they
were ripe, separated into couples, and served up to the hard selling English
speaking representatives paid on a commission only basis, who knew every trick in
the book.
To the great regret of Clancy those happy days had gone. There was little hope of
promoters finding buyers as thousands of British holiday-home owners faced
losses following the collapse of Martínez. The defunct group had sold more than
three thousand apartments and villas, all in various stages of construction, mainly
to British buyers, at more than thirty developments in Spain, Portugal and
Morocco.
The luckless would be owners, who had put down thirty percent deposits on
homes near Marbella and other resorts, were now facing painful losses. Their
dream of a holiday home in the sun had been transformed into a nightmare. What
would happen to the half-built urbanacciones and shopping centres, many of which
resembled a no man’s land of weeds, surrounded by rubble strewn gardens and
scorched fairways?
Gone were the happy days when Martínez had signed joint venture agreements,
or was filmed cutting ground in the presence of smiling local dignitaries, for
residential and tourist complexes, shopping centres and hotels, as far away as
Casablanca and Marrakech, where the glowing entrepreneur was lauded as one of
Morocco’s most important foreign investors, with his group snapping-up thousands
of acres of land for its multiple projects.
At the summit of his glory Martínez had been one of the leading European real
estate developers with operations in Spain, France, Bulgaria, Romania, Poland,
Hungary, the Czech Republic, Slovakia, Morocco, Mexico and the Dominican
Republic. His prestigious sales offices in London, Dublin and Frankfurt had
reassured buyers who flocked to reserve their place in the sun, proud of their new
status; the enviable owners of second homes overlooking azure seas and sun
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drenched beaches.
In the months that had passed since Clancy had been forced to part company with
his employer back in Ireland, he had discovered a different world. It was another
universe to that he had known as an up-and-coming young trader at the Irish
Netherlands’s investment branch in Dublin. He now found himself witnessing the
effects of the gravest economic crisis in modern times, which was now engulfing
Spanish banks and businesses in a tsunami of failure and bankruptcy.
The new world order of George W. Bush had suddenly collapsed in failure and
ignominy. Few, if any, understood the ramifications of the change that was taking
place; including Barack Obama. The scale of the disaster was so great it
undermined the very foundations underpinning the established economic system.
The enemy of Bush the father and son, Saddam Hussein, would have described the
speed and dimension of the collapse as the ‘mother of all defeats’ and this time it
was ‘the Great Satan’ who had fled the battle field with his tail between his legs.
The crisis was now threatening to bring down the financial order that had
governed the world since the end of WWII. The vast unregulated system that
controlled the economy of the whole planet with its enormous international flows
of uncontrolled capital was on the brink of collapse, and the fate of little Iceland
demonstrated what could become of those who had ignored common sense and the
political consequence of their overweening desire for wealth and power.
As to Ireland, it would have been no exaggeration to call it a fool’s paradise, the
Irish had lived on unlimited credit, and the Republic was now threatened with
Icelandization. Britain was not far behind, victim of the greed of its banks, the
foolishness of its politicians and easy credit. For a decade it had been presided by a
complicit government content to believe the praise showered upon it, by
sycophants, for the supposed success of its economic policies. Britain’s finance
industry had grown out of all proportion relative to the country’s other traditional
economic sectors; manufacturing had been relegated to the past by politicians in
the same manner as had heavy industries such as shipbuilding and mining. The
City and its financial services had ballooned out of control as speculation grew to
astronomical proportions.
Hot capital had flooded into the City. Banks had ladled out loans. The whole
country had been seduced by an illusion of wealth; buyers rushed into the property
frenzy: rich, nouveaux riche and less rich, all fearful of missing out on the mad
gold rush, snapping up every kind of property imaginable, from palatial homes in
London’s Belgravia or Knightsbridge for the rich, to holiday homes in the sun for
the would-be rich, or modest semis for young first-timers.