About two years ago, shares in a Spanish real estate developer called Astroc plunged 70 per cent in a week, marking what is today recognised as the end of Spain’s property boom.
Investors fled the Valencia-based company when it emerged its business model – based on buying, or taking options on, land slated for possible residential rezoning – was threatened by questionable accountancy, law changes, rising interest rates and softening demand for second homes.
The company’s market value had become wildly inflated in the run-up to the April 2007 crash, making the fall all the heavier. In spite of frantic buying to support the shares, Enrique Bañuelos, company founder and controller, saw most of his asset wealth wiped out in a matter of days.
