Prolonged exposure to TV property shows could lead you to believe the British routinely take leave of their senses when buying homes abroad. Normally rational people place their faith in exaggerated forecasts for prices and fail to take legal advice. None of these programmes has yet used Noel Coward’s Mad Dogs and Englishmen as its signature tune, but it would certainly be appropriate.

Such “obviously, absolutely nuts” behaviour is, of course, not the norm. But the dismay that has greeted the sell-off of Spanish construction shares indicates many second home owners were banking on ever-appreciating values. This is despite the oversupply of properties in many locations – and events such as Marbella’s town hall scandal where officials stand accused of taking bribes from developers.

Prices in such tourist locations have been sliding for two years, with developers giving big discounts – although this was not apparent in official indices. The reason these figures did not show the whole picture illustrates how old Spanish property market practices can trip the unwary.

Stuart Law, of the Assetz property investment company, explains: “When a home changed hands, the vendor would avoid capital gains tax by taking some of the sale money in cash. The taxman has been clamping down on this, which means the reported prices of sales transactions have started to increase. But this has disguised the discounts being offered by developers that have actually caused prices to drop.”

Spain could soon start to look interesting to bargain-hunters with strong nerves. But the dollar’s decline means that Florida is seen as the buyer’s market du jour . This is despite a glut of new-build properties – and the ailing US housing market. TV shows will not run short of foreign purchaser sob stories for some time yet.

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