My wife, Sally, and I have been following the Spanish property market since the beginning of the housing bubble in 2004. It was just when we first started to educate ourselves about economics and finances, that housing prices in Spain started going through the roof. With our limited financial situation it made it impossible to make our first property investment.

Our intention was not to speculate on rising prices but to earn more monthly cash flow. All of our work is oriented to building and buying more cash flow producing assets, may it be Websites, a business or property. Unfortunately for property we became interested just at the wrong moment as speculation set in, banks started going nuts giving 100% and more loans to insolvent borrowers.

For the past 10 years the largest part of Spain's economy has been construction. With that and tourism, the country doesn't really produce much else. With the construction boom in Spain and soaring property prices everybody felt richer, there was more work, people's houses were worth more, immigrants were migrating into the country for work at record numbers and Spain had the fastest growing economy of the European Union. An enormous bubble was inflating.

Now the bubble has finally popped. In 2007 housing sales starting slowing and in the 2008 sales dropped big time and the crisis set in. Now Spain's sole pillar of economic growth, construction, has come to a grinding halt as there are anywhere from 1 to 1.5 million excess new properties on the market waiting to be sold. Now unemployment in Spain is soaring with no end in sight. People are defaulting on their mortgages and many many properties are being repossessed and auctioned by banks.

If you browse Spain's leading housing site, idealista.com, you can see that asking prices for properties, for the most part, have not lowered much. People are still trying to sell their small flats for the price of a mansion. It remains to be seen how long the high prices can hold out as Spain is expected to be the country to fall the hardest, having had the biggest property boom of the world, even bigger than the US and the UK.