Shattered dreams haunt life in Spanish ghost towns

"A town to live in!" boasts the faded sign in the Spanish town of La Muela, overlooking a new road. The irony is bitter. Only one building lines the road, an isolated survivor of Spain's calamitous 2008 property bubble collapse. "We are victims of the property slump because if it was not for that, all this would be built," said 29-year-old computer specialist Samuel Caravallo from his tidy living room in one of the apartments of the brick- and yellow-coloured building. He pointed out of the glazed balcony's windows to the bare, weed-strewn hills outside. Those hills were the site for 5,000 luxury homes, detached houses, buildings with swimming pools, play areas and shopping centres that should have made up "Ciudad Zaragoza Golf". A residential zone by the northeastern Spanish city of Zaragoza, it should have turned Muela, population 5,100, into the third largest town in the entire region of Aragon. Sold on the architect's plans in 2007, the apartments were subsidised by the regional government and went for 127,000 euros for 90 square metres ($174,000 for 970 square feet). The 19 inhabitants of the only building to be completed before construction ground to a halt had been counting on infrastructure to be developed for their neighbours, owners of future private homes. "We don't have the telephone, or Internet and we don't get our mail," said Samuel's girlfriend, Aurora Maestra, 30. It's no place for pedestrians, either. The few buses that run in the area pick up at the nearest stop two kilometres (more than a mile) away. "Their excuse for everything is that there are not enough of us. But no-one helps us to grow," she charged. The sudden halt to work on "Ciudad Zaragoza Golf" is a symptom of the collapse of the construction industry in Spain: the number of building permits crashed from 734,000 in 2006 to just 91,509 in 2010. The stalled housing project is just one among many: the property boom left a stock of 1.5 million unsold homes, notably in the small towns that sprouted up just before the bubble collapsed. Many are now owned by the banks, which have become the country's biggest real estate agents after having seized homes and building land to settle developers' debts. The banks are desperate to rid themselves of this stock of buildings classed as toxic assets, even at knock-down prices. "Sales have increased enormously," said Jesus Diaz-Meco, real estate manager at Illescas, a small town 45 minutes south of Madrid where detached homes and new buildings are finding buyers after more than two years of paralysis. "Banks are dropping prices by up to 50 percent and more," he said. Thanks to record discounts, there are new signs of life in the windswept streets of Valdeluz, a new town 70 kilometres northwest of Madrid that stagnated as a ghost town for a long time after its first buildings went up in 2007. Conceived as a home for 30,000 people, its population now is just over 2,000. "More than 100 homes have gone in six months: banks are selling thanks to a very aggressive policy on prices," said Roberto Aranda Fuentes, site agent for the project promoters Reyal Urbis. It is an option that many owners and small developers either cannot or do not want to choose. "Prices have still not hit bottom in Spain," said Fernando Encinar, head of research at the online real estate site After surging 155 percent during the boom, the price per square metre (square foot) in Spain has fallen 22 percent from the peak, according to the European Commission's official statistics agency Eurostat. It is not enough to bring the depressed market back to life. For residents in the small, isolated community of La Muela, there is no chance of leaving even by slashing prices: by law they have to remain at least 20 years in their subsidised apartments. Samuel and Aurora hope one day to see the new town that was promised before the crisis. "We hope some of the works could be finished in 10 or 15 years," Samuel said cautiously. "Well, we have no choice but to hope," added Aurora with a bitter smile.